Energy Prices

Woah! Shutting the stable door after the horse has bolted! As tempting as it is to continue with the theme, we’d better cut to the chase!

Smart Meters are arriving as we speak. The DECC (Dept. of Energy & Climate Change) talk in terms of: 160,000 05‐08 profile electricity meters and 40,000 large gas meters (732 MWhs). These are all supposed to be replaced by 2014 and guess what, DECC and OFGEM are still discussing with energy suppliers the type and capability of the meters to be used, it’s that ‘VHS vs. BETAMAX’ debate all over again.

Worse still some suppliers (and we’re including the ‘big six’ in this) have seen this as some sort of opportunity to tie businesses into long‐term metering contracts, making it difficult to change suppliers come supply contract renewal time, and making spurious claims about ‘interoperability with other suppliers’ meters’.

Lets be clear there may be some technical issues, however, commercial restrictions are certainly not acceptable, and these views we believe are endorsed by the DECC. To make matters worse, there are instances of energy suppliers ringing business customers and telling them they must have a new smart meter by next April…it’s simply not true.

Our advice right now is ‘Hold Your Horses!’ be very careful about any Smart Meter arrangements, get Torse to check things out first…

We frequently see suppliers hauled over the coals in the media, albeit usually the domestic market. However, what’s causing much consternation is the fact that despite some legislative changes at the smaller end of the SME ‘Micro Business’ market, the business energy market seems in thrall still to the new energy oligopoly. (see www.torse.co.uk/pirates-energy-companies/ ). It shouldn’t be too much of a surprise, an industry with fundamental barriers to entry, big players, weak governance and little legislation has enabled the Energy companies to take a fairly cynical stance towards their markets.
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The Government has passed legislation requiring all suppliers to replace both Electricity and Gas meters with automatic meters for all (but the smallest) businesses by 6th April 2010. It might sound a long way away, but they will have to change 200,000 meters.

Guess who pays? The government has allowed suppliers to pass on all the costs to businesses. This will be either through your supply contract (much the same as it is for most businesses at the moment) or a separate AMR Metering contract. This will inevitably cause some confusion when Renewing or changing your Gas and Electricity supply contracts; the business or whoever looks after your Energy Supply arrangements will generally be able to assist in this area. This information really belongs to the business and so you can sort out all your own metering arrangements and not just keep paying the supplier.

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The lawlessness and lack of Government commitment has allowed pirates to flourish and regularly hijack sensible businesses already battling against the downturn – and I don’t mean off the Somalian coast. Not unreasonably many businesses today can scarcely comprehend the disingenuous and underhand behaviour of the UK’s Energy Companies. Against a background of wholesale energy costs much lower than the peaks of last year, do we see these reduced costs passed onto businesses? No.

READ MORE ABOUT THOSE DASTARDLY PIRATES