Electricity Suppliers - advice?

[Harry Bloomfield]

In my day job I have, over the years, frequently found myself working for client companies that were start-ups in a field in which there would inevitably be a very long lag-period before they would have any income, and I've seen this pattern before. Symbio have been in existence since 2012 yet by the end of 2017 there was no evidence that they had ever had any real income and had totted up liabilities of at least £2.6 million. They have also now lost all but one of their directors - which may or may not mean something. Ironically, I would probably be less concerned if their website was not so 'impressive' - since I have seen only too often the situation of start-up companies that had, and were trying to promote, totally unrealistic 'very grand ideas', long before they have actually achieving anything - and, needless to say, most of those companies end up going bust.

I understood, perhaps wrongly, that if your were with a company that went bust, they would simply transfer you seamlessly to another company - You don't lose anything?

 

[bri160356]

I understood, perhaps wrongly, that if your were with a company that went bust, they would simply transfer you seamlessly to another company - You don't lose anything?

OFGEM's safety net Harry.

https://www.ofgem.gov.uk/consumers/...net-if-your-energy-supplier-goes-out-business

 

[JohnW2]

I understood, perhaps wrongly, that if your were with a company that went bust, they would simply transfer you seamlessly to another company - You don't lose anything?

Indeed - as I wrote ....

.... I realise that I would not lose financially if they went bust, but could do without the hassle of that - and a company with 'financial difficulties' is also probably more likely to be problematic in terms of setting/adjusting DDs etc.

However, from the reviews I've been reading, it seems to be the case that 'failing' (i.e. soon to go bust) companies often, in their death throes, go through a period of 'adjusting' DDs (presumably in desperate attempts to improve their cashflow) such that many customers build up large credit balances by the time that the company goes bust, and that it can then take a long time (months) to get that money back (which one eventually will) after Ofgem has switched one to a new supplier.

That's one of the things that has been confusing my 'review reading', since (as with Together Energy) a lot of the complaints one sees are essentially complaints about the now-gone-bust company from which customers have been switched to the company whose reviews one is reading.

That's how it seems to me, anyway.

Kind Regards, John

 

[Harry Bloomfield]

That's one of the things that has been confusing my 'review reading', since (as with Together Energy) a lot of the complaints one sees are essentially complaints about the now-gone-bust company from which customers have been switched to the company whose reviews one is reading.

That's how it seems to me, anyway.

Kind Regards, John

That I cannot comment on, because I have never had a supplier go bust on me.

 

[JohnW2]

That I cannot comment on, because I have never had a supplier go bust on me.

Fair enough. However, as I said, reading the Together Energy reviews, there are a lot people moaning that when One Select went bust (and they were switched by Ofgem to Together) they somehow had large credit balances (in some cases £500+) that were taking 'months' to get back'.

It has been explained to us how the third-party 'verification process' can sometimes take 'weeks' in this situation, but I would imagine that that process relies at least to some extent on the co-operation of the previous supplier - and if they have 'gone bust', that co-operation could presumably be somewhat lacking?

Kind Regards, John

 

[SimonH2]

It has been explained to us how the third-party 'verification process' can sometimes take 'weeks' in this situation, but I would imagine that that process relies at least to some extent on the co-operation of the previous supplier - and if they have 'gone bust', that co-operation could presumably be somewhat lacking?

Or non-existant ! Presumably it also involves the liquidators, and who picks up the bill for credit balances where there isn't enough left in the kitty to refund ?
It would be a bit unfair if the new supplier gets lumbered with the debts. Does OfGem (or someone) have a kitty to handle this ? Perhaps there's an industry wide kitty that all the suppliers have to pay into ?

 

[JohnW2]

Or non-existant !

I thought it would probably be obvious that that was what I meant when I wrote, rather sarcastically "somewhat lacking"

Presumably it also involves the liquidators, and who picks up the bill for credit balances where there isn't enough left in the kitty to refund ? It would be a bit unfair if the new supplier gets lumbered with the debts. Does OfGem (or someone) have a kitty to handle this ? Perhaps there's an industry wide kitty that all the suppliers have to pay into ?

Yes, my understanding is that there is a kitty/fund - like, for example, the situation with ABTA etc.

As far as I can make out, these tiny companies are often technically insolvent when they are still trading (and persisting, and being allowed to persist, by virtue of 'hopes about the future'), let alone when they have 'died' - so very little hope of there being any money available for the liquidators to 'distribute' after the company has finally give up the ghost.

... so I wasn't thinking of the lack/non-existence of 'co-operation' being in relation to money (of which there would probably be none) but, rather, the providing the third-party 'verifier' with account information, meter readings etc.

Kind Regards, John

 

[bri160356]

At least that's one problem/decision that I don't have to contend with ...

... I'm stuck with LPG, and that is a whole different (and much more expensive) business. Mind you, at the last count I did very well. When I threatened to switch from Calor (which is now relatively easy {there used to be nonsense about having to have the tank replaced etc.}, albeit there are only a few potential suppliers), they instantly halved my price per litre, for 2 years! However, that 2 years is up in December, so it remains to be seen whether I can achieve siumilar again!
It's not 'minnows', per se, which concern me - I have more specific concerns in the case of Symbio.

In my day job I have, over the years, frequently found myself working for client companies that were start-ups in a field in which there would inevitably be a very long lag-period before they would have any income, and I've seen this pattern before. Symbio have been in existence since 2012 yet by the end of 2017 there was no evidence that they had ever had any real income and had totted up liabilities of at least £2.6 million. They have also now lost all but one of their directors - which may or may not mean something. Ironically, I would probably be less concerned if their website was not so 'impressive' - since I have seen only too often the situation of start-up companies that had, and were trying to promote, totally unrealistic 'very grand ideas', long before they have actually achieving anything - and, needless to say, most of those companies end up going bust.
I'm also a relatively 'risk-taking' person and, in any event, as I've said, I don't really stand to lose very much (other than peace of mind) if I go with a company which doesn't survive. Some of those I'm considering probably qualify as 'minnows' but, as I've said, that in itself does not put me off.

I suppose the main balls I'm currently juggling are the 2-year deals from Together Energy and ESB (and maybe, still, the Together 3-year deal), neither of whom have appreciable track records. If you were faced with that choice (or, indeed, any of the others I've mentioned) would you be appreciably drawn in any particular direction?

Kind Regards, John

It’s difficult for me to give you my opinion without being too subjective, tbh John.

You are obviously concerned(’ish) about choosing a minnow supplier who is new to the market, and minnow suppliers in general, given the possibility that any of these minnows can go tits-up without warning.

It’s a genuine and understandable concern given the recent deluge of defunct energy suppliers;...however, the only way to allay those concerns, with any reasonable(???) degree of certainty, is to choose a tariff from a Big6 supplier.

The only other alternate is a minnow;...1 yr, 2 yr, 3 yr,...it’s your choice...(a 1 yr fixed deal is my preference as I’ve stated previously). You’ll certainly be hacked off if your new supplier goes bust... at any stage!;...however, I reckon you’d be more upset if you were 18 months into a 3 year fixed deal and the company went bust before you’d started to see any of the financial benefits of choosing such a long term (more expensive!) tariff;...that’s assuming those potential benefits had actually started to come to fruition, of course.

From July’18 to September’18 there was a net decline in the number of active domestic energy suppliers for the first time since 2005. By Sept’18 there were 69 UK domestic energy suppliers (the Big6 + 63 minnows) but since then at least 7 minnows have gone tits up;...let’s hope this trend abates!

The Big6 are rubbing their hands with glee though;....they see this as a period when they can start pushing their (already expensive) tariffs back up again,...mercenary bastards.

Reading your previous posts it’s obvious that your knowledge of the whole shebang has soared immensely in the past week and you are now in a much better position to make an informed choice of tariff that best suits YOU!,... so I guess it’s make-your-mind-up time John!

In case you’re wondering where all this bullshit that I spout comes from,...well,...I’ve had a long term interest in the UK Energy Industry,...all aspects, not just domestic energy supply;...it’s an interesting and dynamic topic,...well, for some people anyway.

I’m certainly no expert and don’t profess to be,...just a part-time armchair enthusiast...and before anyone asks, yes,...I do have an Anorak.

 

[JohnW2]

It’s difficult for me to give you my opinion without being too subjective, tbh John.

Yes, I realise that, and I suppose wasn't really expecting an answer - unless you wanted to present some strong argument for (or against) any of the companies in question.

You are obviously concerned(’ish) about choosing a minnow supplier who is new to the market, and minnow suppliers in general, given the possibility that any of these minnows can go tits-up without warning.

Indeed - although, as I've said it is very much "('ish)", since I'm not particularly concerned about a very new 'minnow', per se - it's when my gut feelings have (rightly or wrongly) some specific issues about a particular 'minnow' that I get a little concerned.

However, I acknowledge (and am obviously pleased) that the only real problem of a supplier going bust is a degree of hassle, with little risk of any true 'loss' (at least, financial!).

... the only way to allay those concerns, with any reasonable(???) degree of certainty, is to choose a tariff from a Big6 supplier. .... The only other alternate is a minnow;...1 yr, 2 yr, 3 yr,...it’s your choice...(a 1 yr fixed deal is my preference as I’ve stated previously). You’ll certainly be hacked off if your new supplier goes bust... at any stage!;...however, I reckon you’d be more upset if you were 18 months into a 3 year fixed deal and the company went bust before you’d started to see any of the financial benefits of choosing such a long term (more expensive!) tariff ... Reading your previous posts it’s obvious that your knowledge of the whole shebang has soared immensely in the past week and you are now in a much better position to make an informed choice of tariff that best suits YOU!,... so I guess it’s make-your-mind time John!

Yes, all very true, but I think I am now coming to adopt a far more pragmatic and realistic approach....

Whilst it's certainly literally true that I have learned a lot in the past week or two, and certainly have developed a knowledge of 'what offers are out there' (until tomorrow!), I'm not sure that it has had much 'bottom line' impact on my ability to make the decision.

One of the biggest conceptual decisions to be made is between 1-, 2- and 3-year deals but I have really not been able to address that very rationally because (somewhat to my surprise), I have been able to find very little by way of forecasts of retail electricity prices over the coming years - which is obviously crucial to the arithmetic. Are you aware of any such (credible) forecasts?

However, moving to the pragmatic, I think the main thing I have come to realise is that, at least in some senses, "it doesn't really matter". Indeed, and on the contrary, if I were to cost the many hours I have devoted to this issue over recent weeks "at my usual rate", it would have been far far cheaper for me not to have expended all that time/effort and, instead, just stay with E.ON (which, of course, is what I have been doing for years). Expending significant time/effort in order to potentially "save a few pounds" is certainly hard to justify rationally.

Continuing with the pragmatic, and given that my current DD is a few pounds higher than it actually needs to be if I switch next month (it went up because of the anticipated price increase after April), I think I should certainly allow myself to be content with any deal which, for the next 1, 2 or 3 years, will cost me no more than I have recently been paying every month - and not 'waste time' looking for, and thinking about, deals which might be cheaper than that.

On that 'pragmatic' basis, I think that (provided they are still available) I'm probably going to go for either the ESB or Together Energy (probably the former) 2-year deals (which would cost me significantly less than I have been paying in recent months) or the Together Energy 3-year deal (which would cost about the same as I have been paying in recent months. As above, that would mean that my electricity costs would remain up to April 2022 no higher (or less) than they have been during 2018/9, which doesn't sound too bad. I suspect I'll go for the ESB 2-year deal.

The Big6 are rubbing their hands with glee though;....they see this as a period when they can start pushing their (already expensive) tariffs back up again,...mercenary bastards.

It seems that they have already 'started'. This whole exercise I've been undertaking resulted from the fact that, if I 'stay put', my cost with E.ON is going to increase by about 28% in about a month's time! With a far more modest increase (which is what I probably had been expecting) their prices probably would not have been expesive enough in relation to alternatives for me to have bothered thinking about switching.

E.ON do seem a bit odd though - in that, in terms of what they are currently offering, there is virtually no difference between their (expected to be 'much more expensive') SVR and their 2-year fixed price deal.

Another thing I haven't mentioned, since it is seemingly industry-wide and therefore unavoidable, is that the benefits of E7 are becoming much less. Up until two or so years ago, the day/night cost ratio was something around 2.5:1 - but now one is lucky to find even 1.5:1.

I presume that must reflect changes in day/night differences in wholesale electricity price, which in turn presumably reflects changes in day/night demand (electric vehicles promise to change things much more in the future, maybe even to the extent that night demand, hence price, will actually get higher than day demand/price!). With my current usage pattern (which is unlikely to change appreciably) it's still just about to my benefit to have E7, but things would not have to change much more for that to cease to be the case.

...and before anyone asks, yes,...I do have an Anorak.

... and, as you will have observed, I'm probably not without an anorak, either

Thanks for all your inspiration and support!

Kind Regards, John

 

[bri160356]

One of the biggest conceptual decisions to be made is between 1-, 2- and 3-year deals but I have really not been able to address that very rationally because (somewhat to my surprise), I have been able to find very little by way of forecasts of retail electricity prices over the coming years - which is obviously crucial to the arithmetic. Are you aware of any such (credible) forecasts?

This article seems to be pretty impartial and it’s quite informative;...price increases are seemingly inevitable,...however, at what rate and to what level is up for debate.

https://www.ukpower.co.uk/home_energy/future-gas-electricity-price-forecast

When it comes to forecasting there is a saying that is often quoted in the Finance Industry,...”there are those who don’t know,...and there are those who don’t know they don’t know”

...could apply equally well to the Energy industry, I guess.

 

[JohnW2]

This article seems to be pretty impartial and it’s quite informative;...price increases are seemingly inevitable,...however, at what rate and to what level is up for debate. https://www.ukpower.co.uk/home_energy/future-gas-electricity-price-forecast

Thanks. Yes, that's one of the articles I looked at (in fact, it's one that was still open in my browser), but it doesn't really give much in the way of usable numerical forecasts. It does say ...

The growth of sustainable energy sources has the potential to slow, and even eventually reverse the rise in gas prices, but it looks like nothing can stop a rise in electricity prices.

.... and then ....

The cost of transporting gas and electricity is predicted to rise by around 5-6% and 8-15% respectively in the next few years. And consumers will undoubtedly bear the brunt of these increases as energy suppliers will compensate for any additional outgoings by raising their own prices.

...which seems to imply that, even if there were no increase in cost of generating electricity (which seems very unlikley), retail electricity prices would probably increase by "8-15%" over the "next few years" - but that, in itself, is really all too vague to be useful.

I am a little confused/surprised by ...

It warns that unless the UK moves more quickly towards electric cars and strategies to insulate millions of homes and create new forms of heating that don't foul the air or crank up climate change, then both emissions and bills will increase.

Even though I think it unlikely that will be see anything approaching 'government targets' being achieved, the increasing prevalence of EVs has the potential to result in fairly dramatic increases in demand for electricity, and I would have thought that would be likely to increase electricity prices (particularly given the limited generation capacity), wouldn't it?

Whilst there are obviously many unpredictable and/or intangible changes in the future which would impact on electricity prices, if I could at least find some figures for retail electricity prices over the past few years, I could at least mathematically model them and thereby produce forecasts based on the assumption that historical trends would persist into the future, but I can't even find that data - have you seen any anywhere?

If all else fails, I suppose I could dig out my last few years' electricity bills and see what has happened to at least one supplier's prices over that period.

When it comes to forecasting there is a saying that is often quoted in the Finance Industry,...”there are those who don’t know,...and there are those who don’t know they don’t know” .... ...could apply equally well to the Energy industry, I guess.

That's true of forecasting in most real-world fields (particular those in which political, economic or 'human behaviour' factors are important), but that doesn't mean that attempts to forecast are futile. They are generally 'better than nothing' and, speaking more personally, if we never did it, I would probably have had significantly less income-generating work over the years (even though that has never been a primary activity of mine) However, any forecasting requires data, and the more data, and the better quality the data, the better will be the forecasts.

Kind Regards, John

 

[bri160356]

However, any forecasting requires data, and the more data, and the better quality the data, the better will be the forecasts.

Kind Regards, John

https://www.ofgem.gov.uk/data-portal/all-charts

You should find something of interest lurking in there,...then again...

 

[JohnW2]

https://www.ofgem.gov.uk/data-portal/all-charts You should find something of interest lurking in there,...then again...

Thanks again - but, as before, I've already 'been there'. My previous impression was that there's a lot of data about wholesale electricity prices, but if one clicks on the 'retail' tab, one finds very little numerical historical data at all - but I'll have another look/search!

Kind Regards, John

 

[JohnW2]

.... as before, I've already 'been there'. My previous impression was that there's a lot of data about wholesale electricity prices, but if one clicks on the 'retail' tab, one finds very little numerical historical data at all - but I'll have another look/search.

"Another look" has found the following in one of the linked documents. It appears to show a fairly modest increase between 2011 and 2017 (about 17.5% over the 6 years), but that is misleading because prices for all years are presented in "2017 pounds" (i.e. to show 'real' increases, adjusted for inflation). This graph also misses the large increase in prices which happened in 2018. However, for what it's worth ....

Kind Regards, John

 

[JohnD]

I wonder if there's a case to be made for the transmission and distribution of energy to be publicly owned by the nation.