|
It is a well-known fact that we only live the quality of life we are afforded by the environment around us. In this technological age, gas and electricity are vital elements of that environment and have a huge impact on our lives every day. Residential, commercial and industrial areas are powered by these elements and, without them, we would literally live in the dark ages. However, in recent months, there has been an outcry from large sections of the public regarding how expensive it is becoming to power our homes and businesses as the price of gas and electricity continues to skyrocket. As a result, many consumers have decided to shop around for the provider that can best fulfil their needs. However, this is often a complex process with no guaranteed returns at the end of your search. Price Hike Many energy providers have been heavily criticized purely and simply because their price rises have bordered on astronomical. For example, Powergen raised the price of gas by 24.4% and electricity by 18.4% in 2006 alone. British Gas raised their prices by up to 12.4% in just three months during autumn 2006. Looking into 2007, these price rises beg the question as to whether it is actually worth bothering to find a different provider or just ride out the storm and coexist with the one you’re with. The Environment vs. Quality Of Life Believe it or not, the utility providers have not just raised prices out of greed. They have been forced to do so in order to stay in business as raw energy costs soared (particularly natural gas) during 2006. If you read the news, you will know that pollution and carbon emissions are major issues on the international scene at the moment. The UK government has committed itself, along with various other nations, to the Kyoto protocol. This initiative has been designed to unite the countries of the world against the destructive effect that greenhouse gases have on the environment. However, this has resulted in significant prices rises for so-called destructive energy sources, which is ultimately not good news for the consumer. The total amount of energy consumed within the UK increased by 9.37% in 2004, which is the equivalent of 161.1 million tones of processed oil. A significant portion of the country’s energy had previously come from the North Sea, but extraction of its resources had continually decreased over the last few years. As a result, it is expected that the UK will become of the largest importers of energy in the world by 2015. The Consumer, The Loser As a direct result of global activity and efficiency agreements, the average consumer should expect to pay higher prices for each unit of energy purchased, regardless of which utility provider he or she has chosen. Utility providers are paying higher prices for fuel with tariffs and certain fees added to import the energy for good measure. In order to make a profit, the energy companies and utility providers have no choice but to pass the cost onto the individual consumers in the form of higher prices per unit in order to make a profit. All is not lost, however. Utility providers recognize the fact that individuals that cannot afford their products will not buy for them, thus affecting their profits further. This could potentially have a worse impact than any number of global protocols. They have recognized that alternative fuel sources are the way forward and may afford the general public a better overall quality of life and are ploughing money back into the business as a result. They are thoroughly researching all angles in an attempt to allay consumer criticism and fulfil government demands simultaneously. The Pros And Cons Of Switching When deciding whether to switch utility providers, it is necessary to weigh up the pros and cons of your possible decision. Every fuel provider has one thing in common – they will all offer what they think the consumer will want, even if it is for an inflated price. Price guarantees are quite common at the moment, with all of the major companies offering price or rate freezes until 2010 or thereabouts. However, the downside of this is that you would have to pay a fee, usually a weekly one, to ensure that you stay on the scheme. Switching both gas and electricity to one provider may also afford you a short-term discount on certain services, but this will make no impact in the long run if prices continue to go up. Historical prices rises for one specific provider should not be taken into account when you are considering the possibility of switching. For instance, npower did not increase their energy costs in 2005, but did increase energy costs twice in 2006 to make up for the lack of increases in 2005. Make of that what you will. Similarly, Powergen has the highest overall increase over a two-year period for any provider, but that is not to say that they won’t continue that trend in 2007. If you are thinking selflessly and take the impact of your decision on future generations into account, you may be interested to know that British Gas has the most promising plans. In February, British Gas announced the first major duel fuel cost cut, believed to be around 17%, which translates as a saving of up to £214 per year. They have also promised to provide more environmentally friendly products. Changing your utility provider is actually relatively simple. One phone call can set the ball in motion and the company will do all the legwork for you. However, is there really a good reason to change if another provider cannot give you a guarantee of a stable price for years to come? Current price may not even be a consideration if a supplier can give you a degree of confidence in their promises via a solid contract. It may be easier to compare these terms and conditions on a comparison website to see what deal may work best for you. Changing provider is not a decision to be taken lightly. Your decision can impact your life, and the lives of future generations in many ways. The right decision can bring economic stability and adequate services, but the wrong one can cost you more money over the course of a few years. Environmental impact is also a serious issue to consider because the world can only sustain so much. If you research your options, you will get a better idea of what each individual deal could do for you. Only then can you make an informed decision.
Staff editor, Gas & Electricity Section, March 2007 |
