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How many of you assume that your energy supplier is making huge profits for re-investment in the energy infrastructure? If this is what you have been assuming you are totally wrong as the supplier is totally independent of the distribution company which produces the energy.
Your supplier purchases energy on the wholesale market for re-sale onto you the customer. For example, BGAS purchases energy on the wholesale market and resells onto the consumer and pockets the profit as it does not need to pass on the profit to any other company. The wholesale market is the combination of all the distribution companies, i.e. EDF, SWALEC, Southern, Scottish Power etc.
A bit complex to detail, however in between the distribution company and the consumer are several entities, like meter operator, meter reader and several over monitoring organisations that all push up the price of energy which is why the cost to the consumer is so high and for the benefit of Maurice thsi time it has nothing to do with the current government or previous governments however privatisation of the energy market has created thousands of jobs.
Just makes my blood boil when you see the huge profits these energy suppliers are making at our expense and to boot the public is not enlightened as to the fact that the companies are there to make profit for theri shareholders and not for re-investment into the infrastructure!
The supplier must have a contract with the distribution company to use the infrastructure (meters pipes power lines etc) and they will pay for this. It is up to the distribution company to price the contract so that maintenance and improvents are adequately covered. The regulator has the power tto influence that price.
Exactly certain parts of the industry are open to competition and others are not.
And to play devils advocate here there IS major investment needed to replace generating capacity in the UK. We won't have enough power if this isn't done, does anyone think the governmenr have the billions needed for this? And to renationalise the industry?
Hmm that''s what I thought.
It is easy to critisize big profits that the companies make but I remember someone working out BG's retail profits worked out around £43 per customer.
IMO the real anger should be directed at some of the arrangements in the European markets which aren't as open as they could be.
All the supplier does is raise the invoice for the consumption and nothing more. The networks are owned by the distrubution company and not the supplier. The supplier does not pay a single penny towards this infrastructure or towads maintenance. This cost is included in the cost of a unit when the suppleir buys it on the wholesale market. If you are paying i.e. 10p per unit, the real cost of that unit is probably under 2p but along the way every one wants to make a profit.
Yeah, but the supplier and the districution companies are mostly the same organisations anyway. The companies don't distribute electric in all areas of the country but most of the major suppliers distribute electric somewhere in the UK (except British gas - but then they distribute gas Nationwide).
Incorrect. They are totally different organisations in thnat they are seperate entities but i understand what you are saying. Suppliers do not distribute anything. All they do is raise invoices for which they make massive profits. BGAS does not distribute gas any more as that is done by Centrica who own BGAS but BGAS is a seperate entity.
Basically the nergy companies like us to think that their high profits are justified because we think they use them to improve the infrastructure but they are used for improving the shareholders.
Basically they are overcharging us for energy as the cost of electric on the wholesale market has dropped!
Look everybody has made up thier mind that we're being ripped off so its hard to argue against that. The trouble is if you are comparing to past period you are not comparing like for like.
There is massive demand from countries with HUGELY populations who are industrializing. The UK imports more gas than it gets from the North Sea.
Also consider for a moment the targets energy companies get re social tariff and 'green energy (which generally costs more) this money has got to come from somewhere.
I accept there is something in what you are saying, for example a lot of people phone their power company when there is a power cut only to be told they need to speak to the local distributor (which is whatever company originally supplied the area).
Same with meter readers, for example at NPower we only have our own meter readers in our home areas. I believe at least one of the big six doesn't have any of its own meter readers.
I was somewhat confused myself for a while as to what suppliers do. Essentially they have to pay back to National Grid anything that is used by thier customers. It is not straight forward because there's always an element of guesswork in forecasting what demand will be.
Like anything in the news there are bits of misinformation in there. Like the idea that foreign companies are taking the profits out of the uk. Case in point NPower states on thier website they are going to spend more than they earn over the next ten years building new generation capacity, this money is coming FROM the parent company into the UK.
Also I noticed on the graph watchdog showed that at one point wholesale cost exceeded the retail prices last year. Now consider for a mement how long it would take to recoup a LOSS when you are operating in a low margin industry.
I speak to hundreds of customers a week who owe several hundred pounds on thier bills, this HAS TO, have an impact on any company.
If things are so great why did E.on recently lay off several hundred of its staff????
Again I see where you are coming from but things are seldom so clear cut as they first appear.
I was under the impression that Npower/Eon used MSL as meter readers and if so they are a sub-contracted company albeit part of the RWE group. Npower has changed its name so many times over the past few years that it is difficult to keep track of who is who in the zoo!
RWE is a foreign owned group. German I believe which in turn means that money will be going out of the country to German shareholders. You are correct about mis-information because Npower/Eon as a supplier will not be re-investing in the national grid or improving anything for any body. The only people who can do that is the parent company RWE who I think own the "11" (East Midlands, "14"(Midlands), "15" Northern) and "23" distribution area networks however I stand to be corrected on that.
In what capacity where the workers that were laid off employed at Eon, i.e. call centre, etc?
NPower are investing £200 million in thier systems, this money is coming FROM Germany. My understanding is when it was de-regulated no one company could own bits of everything.
RWE Npower has a part of the company which is involved in power generation, this is where they are spending more than NPower earns as a company every year for the past ten years.
This money is also coming from Germany into the Uk. Things are not so clear cut, but there is a lot of work to do to ensure the UK gets a better deal.
Npower is the original supplier for MPAN area's 15 & 23 and in these areas Metreplus are the Data Collector (meter reader), this company is largely owned by NPower I believe. Not sure about the other two areas you mentioned.
In some areas the available times for meter readings are deplorable, usually this is where your supplier is not the in area supplier.
Many NPower staff are shareholder through sharesave, again things are not so clear cut.
I understand where you are coming from but there are two sides to every story.
To the best of my knowledge E.on's retail business hasn't been doing well for a while. NPower's generation side was doing poorly until the prices sky rocketed, now the opposite is true. Retail has struggled but generation did well.
If you want to get your teeth into something read up on the contracts on the continent which RWE is in favour of being de-regulated. I know little of this myself but the gist of it seems to be we in the UK get scrweded (again). Shocker.
Interesting reading but can you define Npower and Eon? Which one is now the supplier and which is the distribution company. Northern were incorporated into the YELG area and use the same HH Mops etc. MSL now does all the agent work for Eastern and Midlands area. Spent 7 years in the industry and just when you thought you knew it all, along comes another change. I reckon I know more about the industry than the average Joe when it comes to data flows and the MRA. The actual buying of power on the wholesale market is so complex that it is still a grey area to me as it constantly changes especially when you start taking into account liquidated charges etc. I doubt if any supplier monitors every penny going in or out as the regulations pertaining to the industry are so complex. I know for a fact that all suppliers lose millions of pounds annually because of this oversight but to control it, it needs a dedicated team but in the meantime these losses are added to the consumer's bill!
Just to clear up the confusion. RWE npower, does not own any of the distributors in the UK. It is a generation & supply company only. They owned the supply in The North east & the supply & distribution in Yorkshire. They did a deal to get rid of the distribution in both areas & kept the supply.
The former MEB area which was owned by them was sold on several years ago & is now owned by EON under the central networks banner.
The only problem I have with much of this, is that whilst the retail arms of many suppliers are struggling, & indeed making losses in some cases, the generation is making a healthy profit.
I guess it's a bit of creative accounting. Make losses on the retail side so that you don't have to cut prices, then make a nice fat profit on generation AND claim the tax back on the losses.
Your energy supplier!
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