[brooksby]

Can someone please explain how the energy price cap works.

Specifically: in what way is it a “cap”?

I read that the price cap is increased, then will be increased again, and so on and so forth.

I also read that the energy companies’ profits have been increasing massively.

So, in what way is the energy price cap what the chap on the Clapham Omnibus would understand to be a cap (ie. a limit)?

Topic

[Rich_cb]

Once Corbyn has finished
Once Corbyn has finished shilling for Putin on an Iranian funded, pro Hezbollah, pro Assad, pro Russia TV station he’ll get right on it…

Delightful chap.

https://www.theguardian.com/politics/2022/aug/02/jeremy-corbyn-urges-west-to-stop-arming-ukraine

[Sniffer]

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.

[hawkinspeter]

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.

[brooksby]

hawkinspeter wrote:

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.

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

[HoarseMann]

The difference is you used to

The difference is you used to be able to make money generating solar with the higher feed in prices.

[hawkinspeter]

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.

[David9694]

The payment (5.5p per kWh)

The payment (5.5p per kWh) for exported power shows what a one-sided rip-off this now. 

[Sniffer]

There is truth that the

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.

[PRSboy]

Much of that is down to bad

Much of that is down to bad management.  Enticing customers in on low-cost fixed rates and failing to buy forward to ensure that the demand could be met with supply at a known cost.  This meant they had to buy energy in the spot market at prices well above what customers were paying.  However, in the short term, ‘profits’ were distributed to shareholders and directors.

The punchline is that we are all paying for the costs of supplying customers of bust firms through our standing charge, along with the green levy for which we are receiving no financial benefit as renewable electricity is sold at the rate of marginal generation which is linked to the gas price.

Not to mention the decision to close Rough, a large gas storage facility, meaning we constantly need to import gas at points of peak demand, rather than being able to build reserves at points when the price is lower.

[Secret_squirrel]

That link doesnt substantiate

That link doesnt substantiate your statement.  Especially at 2022 leccy prices.

This article is better balanced.

https://www.moneysavingexpert.com/utilities/free-solar-panels

[HoarseMann]

yep, the demise of the Feed

yep, the demise of the Feed-in-Tariff obliterated the already marginal financial case for domestic solar… https://neweconomics.org/2018/04/the-war-on-solar/

[hawkinspeter]

I read someone’s opinion the

I read someone’s opinion the other day on domestic solar panels, and they brought up the point that excess electricity produced is typically sold back to the energy companies at below market rates, which means that people are paying lots of money for panels and batteries and then end up subsidising a private company with the excess energy.

[hawkinspeter]

mdavidford wrote:

hawkinspeter wrote:

a new party fronted by Lunch

That’s all very well, but what’s their policy on Second Breakfast?

Mandatory for all union members.

I’ve corrected my fat fingering now, but at least “The Lunch Party” sounds a lot more appealing than “The Lynch Party”.

Although…

[hawkinspeter]

NOtotheEU wrote:

So if the Conservatives have stolen New Labour policy maybe Labour might move towards ‘Old’ Labour and remember how they got their name.

Given how Mick Lynch has recently performed in interviews showing complete and utter contempt for the media and politicians alike he seems a perfect candidate for the leaders job which is currently held by, you know, that guy in a suit, whatshisname. It’ll come to me eventually.

What we really need is a new party fronted by Lynch and Corbyn pushing a strong socialist agenda to redress the balance somewhat. Labour is now just Tory-lite.

[mdavidford]

hawkinspeter wrote:

a new party fronted by Lunch

That’s all very well, but what’s their policy on Second Breakfast?

[Author]

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