Commodity prices are decreasing - are you still increasing our unit rates? — Bulb Community

Commodity prices are decreasing - are you still increasing our unit rates?

Commodity prices have fallen sharply in the past 4 weeks (power ~17% and gas ~9.5%), along with the previous worries about french nuclear capacity no longer standing, and January forecast to be increasingly milder than previously expected. Are you still increasing the prices?

Given that we're all on a variable tariff, you presumably don't have a very long hedged position (?) so shouldn't have to increase prices in a falling market - particularly as prices have been falling for over 4 weeks.

I'm sticking with you either way but interested to hear what you have to say.

Thanks

Comments

  • edited December 2016
    Hi @celyn - thanks for the post. The short answer is that yes, we will still be increasing our prices on 17/12/16. We will of course drop them as soon as we are able to.

    Wholesale prices have indeed fallen from the highs of 4 weeks ago - as you correctly say this has been driven by a period of mild / windy weather (which we are experiencing now) and reduced concerns about French nuclear availability in Q1. However, prices are still up this year - the chart below shows the change in the cost of gas and electricity for Q1-17



    You're right that as we have a variable tariff, we don't enter into long term hedges, and so can follow changes in the wholesale price. As mentioned in our blog here we do however hedge forward for 3 months to insulate our members from month to month spikes in prices. This meant that we were able to hold off for a longer period before raising prices. If prices continue to move lower from here, we will look at reducing our tariff again in the new year.

    As you can see from our website, we still have one of the lowest-cost tariffs in the market, renewable or non-renewable (after the price increase) and are committed to continuing to do so.



    Hope this helps - we want to be as transparent about our pricing as possible so if you have any other questions or comments, please shout.

  • Thanks for the response.

    Transparency like this will hopefully keep you ahead of the others in an increasingly competitive market - best of luck!
  • edited December 2016
    @amit It'd be cool if this sort of info was supplied on the bills or on the account dashboard--radical transparency in pricing
  • You're welcome @celyn, glad to hear it.

    @nimish, that's a useful idea. We'll discuss it with the team. We'll have to think about how we could extract this data and build it into the site. Would a graph like the top one above be the most useful way of us showing something like this? Or is there a more useful way that you could think of?
  • edited December 2016
    @amit Yeah that superimposed with bulb's prices would be pretty interesting. I guess including it on the bill pdf or account stats would be good. It'd be fairly trivial to do if you already have something calculating it: just include a styled graph. Making the second chart might be more work but there's components that'll do the heavy lifting for you
  • @amit what is the likelihood of a price decrease in the near future? Commodity is significantly lower than in December and non-wholesale costs haven't increased a huge amount. You mentioned holding a 3-month hedged position earlier in this thread - presumably you've locked in some good margins so far this year?

    Don't want to come across as pushy/trolling - genuinely just interested. Thanks!
  • Got an email to say you're dropping prices literally 1 hour after I posted this....should have kept my mouth shut!
  • Hey @celyn glad to hear we managed to resolve your query so quickly ;) awesome timing there.

    Please let me know if you have any other questions.
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