Energy Suppliers, Suppliers of Energy. Gas / Electric

True, but that doesn’t help if you need to buy energy to cover a large chunk of 1.7m customers at market value now, and then sell it to them at anywhere between a 20-30% loss. Unless you have very very deep pockets and can take the hit for a year in order to claw back all the loss (and assuming the customers you being on don’t jump ship as soon as they can)

I found this letter which I think says Ofgem are willing to pay out in April 2022 (which is the earliest they legally can) if you give them a rough figure of how many billion you think you might need.
https://www.ofgem.gov.uk/publications/letter-suppliers-supplier-last-resort-levy-claims

At interesting. I’d seen reference earlier this year that it may take a year or so to recover losses even with the levy from April which is when the next price cap is currently due. Maybe if one of the bigger suppliers can gather enough cash/investment to tide them over to April it’s a quick way to bump your customer base!

Ah, I meant about them getting government support, not just going bust.

It's also worth adding that they have partnered with Severn Trent water recently on some green credentials stuff. Cant remember the memo at this time

Oh right sorry. I definitely thought one of the big six would take on their customers. Obviously they had too many for that.

I wonder what the customer experience will be like with the government as your energy supplier. No precedents in energy but I was actually impressed when I went on LNER for the first time recently - it seems to be much better run than in the East Coast days.

I shouldn't really undersell their green creds as they were one of the first to do 100% renewable I think and I feel like their commitment to it is much more genuine than big six companies selling renewable energy but also running coal/gas/nuclear power stations.

Just that it's stopped being the differentiator it was cos everyone's doing it now!

https://www.goodenergy.co.uk/blog/2021/06/09/when-bulb-claims-to-supply-renewable-electricity-wherever-possible-it-means-just-4-of-the-time/

My fixed rate tariff with octopus (please no referral spam) is somewhat unfortuitously up in Jan.

Their current fixed rate is going to cost me literally double over the next 12 months what the last 12 months cost. Their flexible rate estimate based on my current usage is still unpalatable but about splits the difference between the two.

Recognising that the fixed tariff is a hedge against costs presumably being expected increasing further in the future - what’s my best option? I can switched to a fixed tariff at any time, but am I better off surfing the flexible tariff for now and fixing again when prices drop, or am I just setting myself up for max pain further down the line?

I'd Google Martin Lewis if I were you.

You are in a bit of a shit situation. Octopus won't go to Supplier of Last Resort if they fold, they will go to Administration like Bulb.

You won't get a fixed cap deal now. My understanding is get the shortest fixed deal you can and wait.

But... Google Martin Lewis.

Your best bet now is to roll onto a variable tariff, it’s the cheapest in the market (average household cost at £1290?). Octopus won’t like it, and will try to do everything they can to dissuade you from taking it (along with every supplier at the moment), but they have to have it available. If you do nothing, when your fixed term comes to an end that’s what you’ll end up on (“rolled variable”) then wait till Feb/March and see what’s out there.

Next price cap announcement by ofgem will (currently) be Mid Feb for April start so that’s when we’ll see more tariffs in market.

@Mr_Sworld

it’s the cheapest in the market

My concern is that if variable is cheaper than the 12m fixed they are offering (albeit at 2x current rate), it suggests they are expecting prices to go up not down? Or is variable capped by ofgem, so artificially low vs wholesale costs?

Exactly. OFGEM sets the max price that suppliers can charge for a variable tariff (sometimes called SVT). Currently this is £500-£700 below the level that a supplier would need to charge to break even, hence why a number of firms have gone under as they are unable (due to OFGEM) to pass the rising commodity cost into their customers.

My concern is that if variable is cheaper than the 12m fixed they are offering (albeit at 2x current rate), it suggests they are expecting prices to go up not down? Or is variable capped by ofgem, so artificially low vs wholesale costs?

Roll the dice. it's an uncertain market at the moment. All bets are off.

Personally, if they are offering a Variable Tariff that is subject to UK Price Cap then take that.

It won't be any cheaper but the maximum you will be charged will be regulated by the Government. A fixed deal will have no regulation at all.

Variable tariffs have no minimum contract terms or exit fees.

The price cap will be re-evaluated in April and it's possible the new capped variable tariff rate will be more than a fixed tariff. Unlikely if the companies have got their sums right, but possible.

It should be, but who knows at the moment! We’ll know about the new price cap in Feb, although won’t take effect till April son plenty of time to shop around for deals once more is known.

Smart money is on a pretty hefty price cap increase, as it’s calculated based on the last 6 months wholesale costs. Wouldn’t be surprised if it was near the £1800/£1900 mark (up from £1300) if things stay as they are till Feb.

We’ve just had our 3rd supplier in a row go under and been booted onto an EDF tariff which is double the unit cost for gas and 50% more for electricity! Can’t wait for the first bill…

I don’t understand why the price cap can’t be spelled out as a unit cost by ofgem - referring to ‘average household cost’ everywhere is absolutely meaningless! Theres no easy way to compare it to supplier prices and I don’t know what it means for my household.

Not massively looking forward to April - when my fixed rate deal runs out. At least summer should be a bit cheaper on the gas front.

Just moved. Need an electricity supplier (district heating, no gas). My previous supplier (EDF, who I was on after my previous previous supplier went bust) want to sign me up for a fixed tariff until 2024 with £150 early termination fee. Or I can do their variable tariff (for £12 cheaper a month) and no leaving fee. My very quick google seems to say people think electricity prices will remain at their current (high) levels until 23.

The price comparison pages are borked because no one wants to sign up new customers.

Anyone with a bit more knowledge on this know whether I should I sign up for the variable rate? That's my instinct. Not sure if this variable rate is any better than the variable rates you'd get if your contract ended? Or are they all the same?

All the wisdom I’ve heard from people like Martin Lewis is to take a variable tariff, even if your tariff ends it’s the cheapest option.

All the wisdom I’ve heard from people like Martin Lewis is to take a variable tariff, even if your tariff ends it’s the cheapest option.

This. Take a Variable/Capped option until it calms down next Spring.

This is what I've done today, there are no cheap fixed deals - we are all just going to have to sit it out until April and see how much the cap is hiked.

Thanks all. Glad I was on the right path.

Stay variable for now for sure. However be aware that come April when the next price cap comes into play it’s likely to go up £500-£600 from where it is today (£1300?) to much closer to £2000. It’s definitely the best bet for now for consumers, but may mean that there aren’t any better offers come April and then we’re all stuck anyway. If you can find a fixed rate at or around £2000 you’re probably safest doing that. May pay more now, but for the remaining 9 months (April ->) it probably won’t be much more expensive than variable, and may well be cheaper.

There’ll be plenty of noise in Feb when OFGEM announce the next cap, needs to be 6-8 weeks before or comes into force so time to shop around then and see what’s out there

Terrifiyingly, British Gas offered me 4.5k for a two bed terrace with two people.