Energy Price Prospects

[Ferdinand]

Does anyone have any ideas about the likely direction of energy prices?

 

My current dual fuel deal is up for renewal in April. I am paying £65 per month which is slightly above usage which would be £60.

 

I am inclined to go for the longest fix possible which would be 2 or 3 years, as I think we may be due for some volatility. I am keen to avoid smaller players.

 

I will take a bit of an increase of £100-200 no matter who I go for, and I am happy with my current supplier First Utility. 

 

The renewal offer is +250 ish with a £50 cash back sweetener.

 

Any comments are welcome.

 

I am inclined to negotiate the renewal offer to see how much leeway they have.

 

Ferdinand

 

Edited February 19, 2017 by Ferdinand

[SteamyTea]

Generally by between 5 and 8% over the next two years.

Nationally demand is set to call, but imported prices are up and the cost of new infrastructure is high.

Trump could play a strange one here (don't he always) but encouraging coal extraction for the export.  This will then affect world coal prices, and coal is the 'back stop' energy price.

 

Generally, over the last 40 or 50 years, domestic energy price is about 5% of national mean wage (pretty true across the developed world too).  So taking a stab at energy prices is similar to taking a stab at wage growth.

[AliG]

With the oil price having fallen so much I am expecting a rise in this and other commodity prices over the next couple of years. The US Dollar could also continue to strengthen depending on US economic policy and how Brexit goes.

 

A large part of energy prices is not commodities but paying for the infrastructure which should continue to rise probably a little faster than general inflation.

 

Net net I would be similar to Steamytea's forecast.

 

However, when I have looked at 2-3 years fixes they are often at a large premium to current prices and you are paying a lot for piece of mind. If they are more than 7-8% more than a one year deal I would stick with that.

 

 

[Ferdinand]

Thanks. I will have a conversation this week. I am sure it is cheaper to retan a customer than get a new one :-).

 

My fixed offers are (differential comparison on base of £65 a month):

 

a First Fixed March 2018 v6 Online - £78 pcm

b First Fixed March 2018 v7 - £80 pcm

c First Fixed June 2018 v5 plus - £82/pcm

d First Fixed April 2019 v5 plus - £85 pcm

e First Fixed April 2019 v4 plus - £85 pcm

f First Fixed March 2020 - £86 pcm

 

Their opening gambit was b d or f plus a £50 immediate cashback. The best online cashback offers for switching are about £75 or 6% (of what?).

 

The best 12 months fix I can find is £67/month from Iresa (who?). The best 2 year fix is £77/pcm plus £30 from Scottish Power (" Help Beat Cancer Fixed Price Energy January 2019 v2 Online "). Now if that was for Diabetes I'd risk Scottish Power customer service.

 

Will have a little chat this week. Target seems to be 10-15% off the 2 year fix offer.

 

Ferdinand

 

Edited February 19, 2017 by Ferdinand

[ProDave]

Personally I can't abide rolling credit fixed monthly payments, but accept that may be the bribe you have to take to get the best deal.

 

But are you not looking at this from the wrong angle?  It's not the monthly price you need to look at, but the unit costs for the energy.  Anyone could set the monthly payment low to make them look cheaper, only to find they have under estimated your usage and you get a correcting bill.  Or am I being to cynical?
 

[Ferdinand]

@ProDave

 

Cheers for the comment.

 

I am happy that the monthly payment is a reasonable proxy here because it is based on a fixed usage of gas and electric, which is in my current usage, and I know that I cannot and will not do much more to reduce it in the next couple of years except for a new A+++ washing machine. I think I have most of the low hanging fruit now, short of doing an air test and wandering around with a Cigar.

 

I think that avoiding the price fluctuations is perhaps more important.

 

I can do more energy wise by optimising my solar array, which is tree pruning and perhaps moving some of my east facing panels to the south side, but I would need a car port first to put them on.

 

When I talk to the energy supplier I will make sure that they do not just promise cheaper mo they with no substantive changes.

 

Cheers and thanks for the heads up.

 

Ferdinand

[SteamyTea]

Did you hear the bit on the radio (MoneyBox I think) a while back about how they work out these fixed deals.

Apparently they compare it to what they could charge you, rather than the best deal (or something like that).

So it is always worth checking the rental and unit prices as well.  You bills will tell you the amount in kWh you have used, simple sums after that.

[Jeremy Harris]

2 minutes ago, SteamyTea said:

Did you hear the bit on the radio (MoneyBox I think) a while back about how they work out these fixed deals.

Apparently they compare it to what they could charge you, rather than the best deal (or something like that).

So it is always worth checking the rental and unit prices as well.  You bills will tell you the amount in kWh you have used, simple sums after that.

 

I mentioned in another thread recently about the challenges in actually finding really reliable and accurate tariff information, in order to make an accurate comparison, using the standing charge and the unit price.  It was far from easy, as the price comparison websites don't have good information, and don't even seem to give the best deals going.  Even getting accurate information from a shortlist of suppliers meant several phone calls, as the tariff rates on the websites didn't seem to tally with what they were actually offering.

 

The biggest single problem I had was finding out where the discounts for paperless billing, direct debits etc were actually  taken from.  Two suppliers just refused to tell me, and one felt that I didn't really need to know, and when I insisted (because it makes a difference if you are a low user as to whether the discount comes off the standing charge or the unit price) they were incredibly reluctant to let me know, I had to remind them that they had an obligation to tell me what they were going to charge me.................

[SteamyTea]

Here is EDF's rates:

https://my.edfenergy.com/gas-electricity/unit-rate-comparison

 

Be careful, they assume a certain usage.

 

When we paid a lot for mobile phone calls, I always looked at the price of the most expensive call i.e. once any 'free' calls or texts were used up, then picked the cheapest.  I did not pick the cheapest headline figure and assume that the rest was equally as cheap.  Mate of mine got seriously ripped off like this.

Edited February 19, 2017 by SteamyTea

[Jeremy Harris]

Being careful is what it's all about, as it's not always easy to see things like the assumptions they use when publishing tariffs!

 

For us, EDF are a fair bit more expensive than SSE, but then there are pretty big variations from one post code region to another.

[Ferdinand]

Cheers all.