Yesterday's Twitter thread on energy companies that I shared here proved to be popular:
People are angry, and want solutions.
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Was talking to some politicos last night. They recognise the problem, but have very little idea on how elec markets “function” & by extension, how to reform them. The lack of understanding is “grand canyon” in size. The “experts” that do claim to understand markets are wedded to outdated nonesense & offer no solutions wrt market reform.
Natural gas prices hit Euro310/MWh today – which translates into elec @ Euro720 & surprise surprise, last night (2100hrs) prices across the EU were Euro850/MWh for elec. UK prices are very similar. This is a disaster scenario – particularly given that – & I offer Denmark as an example: most generation in Denmark was supplied by wind or cross-border hydro (gas was 3%). So if elec was priced at cost of production prices should have been +/- Euro60/MWh. Market failure – thy name is the wholesale elec market.
This leaves the open question: people are angry (they can join the queue behind me) – what can be done? This has gone far far beyond writing letters to MPs. Face to face confrontations is the only way to get things changed. Head of Ofgem? why not visit him at home for a full and frank discussion? BEIS officials? find them, visit them. etc.
PS: the solution basically comes down to accounting – the treatment of and the pricing of elec from different sources. All the data is available now. Elec market reform should take weeks – not years.
I do not propose lobbying homes
I do think protests fair
I agree that without significant action many will not survive.
However, there are many who will survive, but only by massively cutting back their discretionary spending. Such action will of course destroy that part of the economy that depends on discretionary spending. There is already plenty of evidence to suggest people are cutting back on buying things they don’t really need, while spending a higher proportion of their income on things they have no choice to pay for. I see it all the time in my local city center and all the boarded up shops. I’ve never seen it so bad and that includes Thatcher’s recession in the early 1980’s.
It’s the perfect storm. In fact I would say that right now we are in the eye of the storm. Many are blissfully ignorant of the brown stuff that is about to hit the fan. The Tories either know this and don’t care or they are pig ignorant. Eventually I think the Tories will do something once their 10 week free media love fest leadership election show is over. Something that could have been done in a weekend. They know how to milk it. Trouble is, the Tories and Truss don’t have their heart in doing anything. They prefer leaving it up to the market and social Darwinism.
You get it
I wish I knew why so many do not, yet
The people may be even more angry when they realise that the Tory Government are providing the finance for the Isle of Man government to implement Keir Starmer’s Energy Price Cap policy in a tax haven.
Electricity bills will be FROZEN all winter – but only in one small part of the British Isles.
The Isle of Man, the self-governing Crown Dependency of 84,000 people in the Irish Sea, will fund the landmark move with a scheme like one being proposed for the UK.
Electricity bills will be capped at the current 22p per unit until 31 March 2023, avoiding a predicted rise to 37.4p from October 1.
Funded by a government loan to be repaid over 20 years, it will cost £16-26million.
https://www.mirror.co.uk/news/politics/electricity-bills-frozen-winter-only-27825359
How do you think the Uk government is doing that? Your claim does not fit in with my understanding of how IoM finances now work – and I have studied them more than most, I suspect
Having looked into this further it looks like I may have misread the Mirror article and it is in fact the Isle of Man government that is funding this through a loan to its utility company. In my defence I would say that the Mirror article wasn’t particularly clear.
Subject to approval at the September sitting of Tynwald, the price cap will be funded with a Government loan to Manx Utilities to be repaid over a 20 year period. The total loan may be up to £26 million.
https://www.gov.im/about-the-government/departments/the-treasury/news/?altTemplate=ViewCategorisedNews&id=143430
“The aim here is to flatten the curve on the cost of living increases and give households a degree of certainty and time to adjust to what may be a longer-term set of challenges,” the Isle of Man’s Treasury minister, Alex Allinson, said.
The government is funding the price freeze through a £26m loan to the electricity firm, which would be repaid over 20 years. However, that loan still requires formal approval of the Isle of Man’s legislature, the Tynwald.
https://www.theguardian.com/money/2022/aug/24/isle-of-man-to-freeze-electricity-prices-until-2023
Thanks
I have been discussing charges with my provider (Octopus) I stopped my direct debit and for the time being I put in meter readings and pay by bank transfer when the account comes in. I suppose there is little they can do about unit prices but when I queried standing charges they said nothing really to do with them it was Scottish Power who levied the charges. With my next account I intend to pay for the units but dispute the amount on standing charges and withhold it from them. Flush out who sets the standing charge. Octopus said it was for the connection of supplies and charges to new customers. Well I’ve been in this house for 18years+ so the installation costs must have been recouped many times over, so why do they keep going up? Seems to me like they are punitive charges.
They are. It telling you the truth
Standing charges are not for that
Just Google them
So the standing charge also includes “ The new standing charge caps introduced in April 2022 also cover the administrative costs of switching failed energy companies’ customers to new suppliers.”
That surprised me I must say. So all energy supplier Customers are paying because a company went bust? What happened to the Free Market? Ok I know.
The whole thing is one almighty mess.
Correct
I notice a range of commentators/media outlets discussing the energy crisis.
https://www.independent.co.uk/news/uk/home-news/ofgem-protest-energy-bills-b2153805.html
There was also Chakraborrty in the Guardian.
None of them have a clue, they don’t know enough to propose solutions (of which there are several) or to even counter the burbuling garbage that Ofgem spouts (summary: there is nothing we can do). Thus the UK meeja is prostrate.
This is what happens when a key sector, energy, is operated on ideological grounds. For 40 years the English (& these are the ones responsible) have voted for tory-vulture and vulture-lite & thus we arrive in the current (or lack thereof) situation. No different with water (does Sir want one or two turds in his sea water), NHS (more & harder privatisation), transport – the trajectory of reducing workers to serfs is clear.
The English have voted for all this – on a regular basis – groomed by a know-nothing/don’t want to know anything/functionally incapable of knowing anything “meeja”.
Quoting V: “but if you really want to know who to blame – you need only look in a mirror”.
The Tory-s warble on about “taking responsibility for ones actions”. Voters should have informed themselves – which was difficult in the 1980s, easier in the 1990s and simple post-2000. They didn’t – & will now live (or die) with the consequences of that failure.
Last point: none of the political parties have a clue. Liebore and Lying Dems – both vaccuous in their responses. No knowledge, no clue.
I need to talk to you about a thread……