Monday, February 20, 2012

Energy prices

Vaguely topical, but yet again it's time to renew the business's energy prices and yet again the price being offered is hilarious. This time they've put the price up but only by £1,800 a year so they're getting better.

It gets better the renewal letter details the increased unit charge, but makes no mention of the standing charge. It doesn't amount to much but it's hardly a 'contract' when they miss off one of the tariffs.

Turns out they'd offered us a landlord's tariff - you know the one they don't advertise and you specifically have to ask for where there's an increased unit rate, but a zero standing charge; ideal for vacant properties when you don't want the costs to disconnect and reconnect the power.

A revised tariff is now 'only' £800 more. Others have offered tariffs that amount to roughly £300 more, but they're all one year contracts. The question is - will electricity prices increase beyond that i.e. in a year's time will I be renegotiating at a higher price?

If I state our current price at 0 then using our existing supplier will result in +800; for a two-year contract +1600. If we use a new supplier then that will result in a +300, but only for one year. Okay so imagine the prices return to the 2010 levels of our existing supplier.That would produce a +1000; add in the new suppliers and that's +1300 for two years.

In order for it to reach the full +1600 next years prices will have to be higher than anything we've ever paid in the last seven years.