The Electricity/Energy Situation

 Like about a million other people I got caught up in the run of electricity companies going bust. I was with PFP and I only found out when I went on the website to check my bill.

And now energy prices are through the roof. At the time I got swapped to British Gas as "supplier of last resort". It sounds all very procedural according to OFGEM. But according to the very bitter email I received from PFP (which incidentally was a not for profit aimed at bringing reasonably priced energy to homes that needed it) this is not the case. According to them, the customers of failed energy companies are Dutch auctioned amongst the five big suppliers. It's a bidding process and in PFP's case British Gas "won".

From the start I was told not to swap supplier as it can cause "confusion". Well, I could not give a toss about confusion. The writing was on the wall: energy was soaring in price and the price cap was getting pushed up in October. So I totally ignored that advice and started looking for a reasonably priced deal.

The first bad sign was that quite a few of the better known "cheap" suppliers had already been gobbled up by the big suppliers while they were still in the black. Why would they do that if not to remove competition?

Next was that a number of switching websites were only offering deals from companies that they had "partnered" with. By that I can only assume they meant they were taking money from to direct their way.

Another issue I found with switching sites is that they are set up for a more competitive market than exists now. uSwitch and many others are designed to take your details, look at your current plan and show you who is cheaper. Great in a market working the way it is supposed to. That's just not today. So when no-one is cheaper you get a blank screen. As far as I could see there was no option to just show me the entire market and I'll make my own decision. If you don't have any supplier then you are screwed.

In the end I've gone with Neon Reef. They were the cheapest of what was on offer but by no way cheap. But even this is not straight forward. They will give you an estimate of what you will be paying a month based on your usage figures. Great, looks good.

But the next page is where you get the kick in the balls. What they actually showed you is the average over the year. The way they run payments is that for six months you pay 50% extra so that they can buy contracts for energy for the last six months of your deal. It turns out that instead of paying £40'ish a month like what they lured me in with, I am actually paying £65 a month for the first six months then £35 for the next six months.

That's a pretty big financial shock if you are running a budget where every penny is accounted for. An extra £25 a month needs to come from somewhere. It doesn't matter that my bill will drop in half next May, I need that money here and now.

I'm pretty lucky in that I can massage my budget so that it adapts to that. It still means cutting something else out of my budget for now (I've got a few options for that and not decided which is going). For a lot of people that is simply not affordable. I would guess that is how most energy suppliers are going to start operating. Charging you up front fees so that you can have cheap energy on average over the year. Trouble is, for people who are already facing fuel poverty that isn't going to happen. They can't just magic up an extra £25-35 a month for a short period.

So what happens to them? Stuck on the big 5 suppliers at their inflated prices because they have a captive market and shareholders to keep happy. Utility switching is something else that is now a privilege of the middle class.

This is something that has always pissed me off about "personal finance" experts that populate social media. They are almost always aimed at the middle class and are about getting more for less by using the leverage that being middle class brings.

It's about leveraging good credit scores. Having cash that you can afford to move around different bank accounts to get cheap deals. Two-for-one deals on dining out and hotel rooms. That kind of thing. If you can't afford a treat from your local chippy then none of this has any relevance.

It's sold as "advice" but the reality is it's more like school gate gossip. It's not about financial survival. The usual response for people like that is "speak to Citizen's Advice". They don't want you. This is about people who already have "stuff" getting more "stuff" while those that need it are shut out.

There is a lot about what is happening right now that I do not understand. There is a government that is performing dreadfully, one of the worst performing in modern history. Even if you factor out covid there is no getting away from how badly Johnson et al have done since they took power. No-one is opposing that. The other parties are dead in the water. The media is largely supportive of the government, including the BBC. But worst of all, there is no public backlash. Where are the protests? The only thing you see are a bunch of affluent London pensioners and trust fund students lashing themselves to the M25 over insulation. It is incomprehensible that the public, regardless of political leaning, should tolerate such utter incompetence and bad management.

We are also an affluent, stable democracy (and if you don't believe that you need to look at most of the rest of the world). But we have collapsing supply chains. Food shortages. Fuel shortages. Sky-high energy and utility prices. Massive inflation and a stagnating economy (a bounce-back to pre-covid levels is not growth regardless of how it is spun). These are the conditions you would expect to see in emerging economies.

It is baffling.