07.05.08 6.8 million in debt to energy suppliers
6.8 million families are already in debt to their gas and electricity suppliers, with the average debt working out at £114, according to research carried out by uSwitch.com. This could be set to rise substantially since not many of us have bothered to adjust our direct debits to take account of the recent price increases.
Providers have written to customers advising them of the fact that prices have increased and explaining that they are unable to increase the amount of the direct debits on customers' behalf, but so far only around 1 in 7 of us have asked the suppliers to make changes to the amount we pay.
This may not all be down to apathy on our part, however, since only 29% of households have received concrete information on just how much the increases amount to – about £136 since the start of the year, taking the average annual bill to over the £1000 mark.
Of those who have already asked their provider to increase the amount they pay, the average request is £14 a month. 40% of those, however, (i.e. about 5 in 100) have only increased the amount by £10 which is bound to leave a shortfall.
Apart from the obvious problems associated with running up debt, householders will be unable to switch provider if they are more than £100 in the red, which at a time of swiftly rising prices is bad news for those who want to keep their outlay on energy to a minimum.
The founder of TheEnergyShop.com predicts that record oil prices will mean further increases, with the picture for consumers getting “gloomier by the day”.
22.04.08 5 million switch energy provider
Recent figures from Ofgem have revealed that more than 5 million of us changed gas and electricity provider in 2007, the highest figure for five years. Alistair Buchanan, Chief Executive of Ofgem, says that this is proof that suppliers with uncompetitive prices and poor customer service are losing custom.
Whilst this news may indicate that more and more of us are taking heed of the advice to compare deals and switch provider, Moneysupermarket.com sees it not as evidence that more people are changing provider but that the same people ("tariff tarts" as they are nicknamed) are changing more often.
Whatever the true picture is, not everyone is getting the message that it pays to shop around for the best deal. Pensioners, the unemployed and those on low income are the groups least likely to change provider and it is with this in mind that Ofgem, in association with the Citizen’s Advice Bureau, have launched a new initiative, “Energy Best Deal”, in order to get more of the groups most in financial need to change provider and also to make them properly aware of what help is available from the Government and the industry in paying their energy bills.
63% of householders are still on a standard tariff, receiving their bills through the post and paying by cash or cheque. The advice from those in the know is that savings are to be had by signing up for online deals, paperless bills and paying by direct debit. For those without access to the internet, the Switch with Which? Freephone service may be of interest.
15.04.08 Shetland to get new gas plant
Sullom Voe on the Shetland Islands is one of the big boys in the world of gas plants and now it’s set to get even bigger. It has been revealed this month that it will receive around £60 million to update its plant. BP, who operates the plant, has until 2010 to bring the 30 year-old plant into the new age, a challenge they confidently feel they can meet.
The plant currently brings in hundreds of liquefied petroleum gas (LPG) tankers a year and sends them off again fully stocked. But this is about to stop. The gas that is extracted from the North Sea and arrives at the plant will instead be re-injected into crude oil and then exported this way, or go to power the on-site power station.
As always with such a big business move, there are a lot of differing opinions in relation to how this massive expansion will affect staff at the plant. The plant’s management is insisting that it will create jobs in the first instance (but perhaps only due to the actual building of the site) but then make people redundant in the long term. BP has admitted that around 40 members of staff will be lost over the long term.
Whatever the case with staff numbers, the plans have been passed and the work is set to commence in Autumn 2008 and the actual building in Summer 2009.
08.04.08 Budget not 'green' enough
The Treasury’s budget has to please a lot of people every year and, to many, 2008 should have been all about the environment, had it not been for something that came along in the latter part of last year called the Credit Crunch. Alistair Darling promised that green issues would be top of his agenda at the start of last year, but when he read it out in March, the budget didn't please the environmentalists here in the UK and there have been calls from bodies such as Friends of the Earth for the government to do more.
Darling’s budget this year said it would increase taxes for the most polluting cars, give financial help to those that need to insulate their homes properly, force retailers to charge for plastic bags, increase road fuel duty by half a pence a litre, and introduce a few other measures. However, a spokesman from Friends of the Earth said it wasn’t nearly as green as Darling promised it would be. The government could respond to this by saying they are still planning to put together a special Carbon Budget next year, which will outline more detailed plans for getting carbon pollution down by 2022. But another spokesman from Greenpeace is sceptical about the government's mindset. He makes one criticism by saying that there is no point in raising taxes on air travel when there are plenty of plans to expand airports.
A project called the Green Home Service is due to be rolled out in the next couple of months and with an impressive £26 million budget and the intention of providing UK residents with effective ways to reduce their energy levels and waste, it’s the answer Darling hopes will please many of the recent critics of his budget.
01.04.08 Second round of price rises likely
Last week Scottish and Southern Energy announced price rises of between 12% and 15%, the last of the big six providers to do so. It is almost 3 months since Npower raised its prices, with British Gas following suit less than two weeks later. Scottish and Southern have been true to their promise to freeze their prices for as long as possible and their customers can be thankful that they have reaped the benefit of cheaper tariffs during the coldest quarter of the year, a time when consumers use on average 40% of their annual gas and 30% of their annual electricity.
Consumers are, however, irked by the fact that shortly after announcing their price increases, energy providers also announced huge profits - in the case of British Gas these profits amounted to £571 million, a staggering six times more than last year. There is likely to be more bad news for consumers later in the year, with a second round of price hikes almost inevitable. Gas prices on the forward market for winter 2008 are 22% more than at present, an increase which is bound to be passed on, at least in part, to the consumer. The predicted rise of around 10% is likely to increase the average household energy bill to £1153, almost £250 more than at the start of this year.
Whilst the majority of us constantly check for better deals for our car insurance or mobile phones, it is a curious fact that far fewer of us bother to see whether we could get a better deal on our energy bills. The Switch with Which? service suggests that consumers should do a bit of research and see if there is money to be saved by changing provider, opting for paperless bills, paying by direct debit or choosing a dual fuel deal, where your gas and electricity come from the same provider.
