Posted by Samsaranda on 22/08/2022 11:30:31:
Martin, I can easily see that coming. One question that needs to be answered is when tariffs are variable, as is being proposed, how does that fit in with the Regulators Price Cap for unit prices for customers, it makes a mockery of a Regulator ensuring that customers annual bills are reasonable and affordable.
Dave W
I don't think it alters anything. The Price Cap sets a maximum that a retailer can charge his customers. A variable rate meter wouldn't be allowed to charge more than the maximum.
Is the Regulators Price Cap a good idea, well-implemented or is it failing to deal with today's problems? I think not. The system was set up when gas prices were stable and it's purpose is to stop privatised retailers making excessive profits. Unfortunately, it doesn't cover what happens when Wholesale prices rise, with the result that over 30 energy supply retailers went bust, and their customers were almost all transferred to the 'supplier of last resort'. Not supposed to happen and the taxpayer picked up the bill. To make the system work at all, the price cap has to be reset quarterly. I think it would be better to let prices float: the regulator is malfunctioning.
A very unhealthy development in my opinion is the expectation that government should cover rising energy costs. Bad news for the taxpayer, but worse because it artificially sustains high-prices. Consumers need to cut back on energy: when supply exceeds demand prices will fall. This year we should all turn the heating off, go to bed early, and wear a vest and more jumpers!
Supply and demand causing prices to vary is the norm. Happens every time I buy food, materials, houses, insurance and petrol! The only reason electricity, gas, and water are fixed rate today is because the technology to make domestic variable rate meters didn't exist in the good old days.
Dave
Edited By SillyOldDuffer on 22/08/2022 12:16:51