Energy and Climate Change CommitteeWritten evidence submitted by Martin Allan

Prices

What factors determine energy prices (wholesale prices, company operating costs, green levies, company profits etc)? What contribution do these factors currently make towards a typical household energy bill and how might this change over time?

All, but we don’t know by your own admission (63) how genuine price and profit is relative to production, , and if you don’t know you ought to know because tax in ever form must be directly related to all delivery aspects of energy production and supply. Speculation determines wholesale prices and also causes instability in the energy market place. The demand on energy consumption is relatively stable and relatively predictable in the domestic market, mainly its fluctuations is weather. Insulation and home production of energy would over time directly challenge monopoly to the point that utilities will drop price to meet that alternative its not clear green deal it a domestic generation option.

To what extent (if at all) should the Government or the regulator intervene in the market to affect the prices consumers (or certain groups of consumers) pay for their energy? Should any changes be made to the Government’s current approach?

Energy poverty is no longer postcode specific its disposable income specific, indirect intervention to support individual domestic energy production as well as insulation, to challenge monopoly and allow alternative green market entry. Allow no bench marking and one fixed unit rate for energy. Government has failed and it appear it will fail to address the lack of open market issue and seems intent to allow monopoly companies to agree a bench mark unit rate to stop each other undercutting for custom (why), while by your own admission government not sure about operating costs of utilities. They might tell you what their margin is but you are not in a position to say it’s real or “cowboy builder” approximate. And proposing monopoly companies will install smart meter, but consumers will pay for that installation to tell them how to be efficient when in reality government doesn’t know how efficient the supply is. It’s not an open market governments have been sleeping on the job, and allowed it to become too complex allowing monopoly comfort in chaos.

How effective is Ofgem in ensuring consumers getting a fair deal? Are there any areas for improvement?

They appear to be questioning infrastructure priorities which shows concern about operating cost legitimacy which is good, They mean nothing to me as poor consumer, I am confident they will tell to go through a complaints procedure which will involve a lot of my time and capacity to understand what needs not be a complex relationship with utilities, which I will withdraw from due to a lack of capacity and time. .It could be effective, however if you don’t know the cost of energy production ,structure or strategy it is not in a place to determine fair pricing while you allow a monopoly to exists, they can peruse rule breaking but not price. Therefore they mean nothing to me. An improvement could be once you have a real open market and remove the possibility of benchmark removing cartel and barriers to market entry forcing monopolies to fight for custom with each other making it easier to determine anti-competitive practise I will benefit.

Could it be possible to benchmark energy prices to provide greater certainty about whether consumers are getting a fair deal? If so, how might this is achieved in practise?

Monopoly is already benchmarking and you are allowing it to become oppressive consumer choice, remove benchmark and robustly promote competition.

Could any other measures be put in place to ensure consumers are paying fair prices for energy and to provide consumers with greater confidence in this?

open the UK energy market to the world, don’t allow energy to go out of the country cheaper than its coming in, one rate of electricity per unit/£ only, always guaranteed for one month for each energy provider with energy consumers given the same obligation. All consumers can sign up to ofgem e energy management, I can go on the ofgem site and see all energy companies one unit rate for that day and change at the touch of a button as would be the case of a market trader buy or sell. Ofgem will be able to monitor and administer provider’s performance and behaviour directly. As it was said energy is leaving the country cheaper than its coming in open the ofgem market to the world market, to take advantage of that scam also.

Profits

Many consumers believe that energy company profits are the reason the energy bills have been going up in recent years. Is this perception fair?

Yes and you are not in a position to say they are wrong because you don’t have a handle on utilities operating costs or profit. It is not your concern that efficient companies are making a profit it is only your concern if those companies are making a loss by other anti-competitive practice. A company will be healthier if it addresses turnover rather than profit government should be the same. There is not a competitive market .

Why is there so much uncertainty about the level of profits the large, vertically integrated energy companies are making? What could be done to improve clarity?

Vertically integrated companies are making is that a word for monopoly cartel .Ask HRMC to do their job and get people who understand tax avoidance nationally and internationally and remove complexity and replace it with clarity of production to terminal price. That’s task 1 AND IF ITS TO DIFFICULT OR COMPLEX THERE IS A TAX GAP.

How useful are Ofgem’s electricity and gas supply market indicators in monitoring the level of profits made by energy companies? Could they be improved?

They are irrelevant because to get profit to an acceptable public perception level it would just have to spend money on something ridiculous or sensible to put price up and justify lower profit, government would not know because you don’t even know what the operating cost are or if profit is a paper exercise. ofgem seem to realise this telegraph December.

How useful are the segmental generation and supply statements that major energy suppliers are required to produce in understanding where companies are making their profits?

Complex and irrelevant and detached from the end user eg ,All my bill has to say for the month is your bill is £36, £1 a day consumption, £5 operating cost equalling £1 business operation, £1 busines profit, £1 infrastructure £2 government tax.

Fuel Poverty Household Micro Wind Generators and Solar Panels is the Poverty Solution

Is the Government on track to meet its target of eliminating fuel poverty by 2016 and will reduced Government spending in this area affect their ability to

Achieve this target?

Eliminate fuel poverty by 2016 No, reduced pending will clearly make thing worse.

Has the Hills Review resulted in any changes to fuel poverty policy? How could its findings be used to improve the efficacy of fuel poverty policy?

I can only see in Hill report measurement proposals, not fuel poverty solutions at an individual level. I don’t need you to tell me I am in fuel poverty I need a solution or alternative to get me out of it , fund installation of winds solar in my back garden and let it pat for itself and after that you can make a profit on what I don’t use. Green deal doesn’t seem to go that far.

To what extent are current fuel poverty policies reaching the right people? Are there any particular groups that are currently not getting the necessary support?

And will this change under the move to ECO? Eco will help but it won’t address price or the integrity of open market, market entry to compete with big six or allow household solutions to self-generation ,

What support is available for fuel poor households living in solid-wall and hard-to-treat properties? Could this be improved? Green Deal. Best solution Is to make them energy neutral bys elf generation taking them out of carbon measure figures. Cavity, cladding and other insulation will help but it is not a solution to neutralising price.

Will the Government’s proposals to ensure that consumers are on the cheapest tariff have any impact on fuel poverty? Yes but price I different, and if the cheapest tariff is out of reach it will a no effect on poverty.

To what extent do fuel-poor households engage in switching? What are the barriers to greater levels of switching from these groups?

It too complex and require capacity to assess and understand most people not just fuel poverty don’t understand

To what extent do fuel-poor households current take advantage of energy efficiency schemes? Not sure. Can anything be done to increase uptake? Give them the projected savings as a bill cut for a period upfront then remove it if they fail to engage,

February 2013