Energy price cap

There is truth that the poorly managed went out of business and yes we are all paying for them.

I suppose my ire is more with those that create the system rather than the companies themselves.

The price cap, which was never expected to be the minimum anyone paid, is not and and never has been, designed to protect those vulnerable from significant bill rises.

Sniffer wrote:

There is truth that the poorly managed went out of business and yes we are all paying for them.

I suppose my ire is more with those that create the system rather than the companies themselves.

The price cap, which was never expected to be the minimum anyone paid, is not and and never has been, designed to protect those vulnerable from significant bill rises.

Is it poorly managed or just the end-game of capitalism? I'd argue that if they made a short-term profit and then left before they had to deal with the aftermath, then it's exactly how our financial system is designed to operate. I mean, what's the worst that could happen to them - if they go broke, then the tax-payer foots the bill.

brooksby wrote:

It is funny how 'the market' (well, the high value end of it) always needs and gets taxpayer support when things go wrong...

With utilities, there is at least some rationale behind that. If an electricity company goes into administration, what happens to the customers? It wouldn't be great if suddenly x% of the country gets suddenly cut off despite them paying the bills.

This is part of the problem with having essential infrastructure in the hands of private companies that only really care about profit and not their customers. What we need is public ownership of the fuel companies (and other utilities) and then the tax-payer can push full-steam ahead with converting to wind/solar power and reap the benefits in the future.

However, that's long-term thinking which our political system does not select for.

hawkinspeter wrote:

Sniffer wrote:

There is truth that the poorly managed went out of business and yes we are all paying for them.

I suppose my ire is more with those that create the system rather than the companies themselves.

The price cap, which was never expected to be the minimum anyone paid, is not and and never has been, designed to protect those vulnerable from significant bill rises.

Is it poorly managed or just the end-game of capitalism? I'd argue that if they made a short-term profit and then left before they had to deal with the aftermath, then it's exactly how our financial system is designed to operate. I mean, what's the worst that could happen to them - if they go broke, then the tax-payer foots the bill.

I suspect in this case it was just poor risk management.  Maybe not identifying the risk, certainly not doing anything about.

For something as critical as domestic energy supply, with a Regulator, it is not acceptable that there was not a check on the financial viability of a company if the price of energy spiked.

Unfortunately the original subsidies for wind generation (ROCs) were terribly designed so they continue to drive electricity prices higher.

The new CfD subsidies are now lowering prices but unfortunately the ROCs will continue to run until 2035 so we've got a long time to wait for that particular government mistake to work its way out of the system.