@“Will at Bulb” is out of the office this week so I’ll let him comment on the unit rate vs standing charge.
Furthermore, that explanation is interesting, why is there a major difference between credit and prepayment customer with respect tot he price per unit for each fuel? With your explanation that unit price for each fuel would be the same for both type of customers, however, the daily standing charges would be different, due to the extra cost in running prepayment system compared to the credit meter system.
Yes, the unit rate for prepayment meters is slightly higher. We have to pay for lots of extra parties to be involved with prepayment meters:
Payzone and Paypoint make it possible for you to top up at your local shop.
Siemens handle the transfer of funds and the delivery of keys and cards.
The network service provider transfers information between the two.
There’s additional hardware involved with prepay meters such as keys, cards and the machines in your local store.
However, many of our members prefer to be on prepayment meters despite the slightly higher charges. This is because you are in control of when, and how much, you top up.
@“Eleanor at Bulb” Thank you for the response, however, in previous comments by @“Will at Bulb” that the unit price reflected the cost of energy from the wholesale market, and the daily standing charge covered all the operational cost within bulb which included:
We base our unit rates on the cost of buying energy from generators and we base the cost of our standing charge on the cost of serving each home (hiring staff to answer the phones, paying transmission fees, etc), and then we add a small amount on top of that for our own profit. And since we have promised in our pricing principles that we will always lower our prices as soon as we can save an average home £20 a year, we have effectively capped the amount of profit we can make from each home.
so your explanation is contrary to @“Will at Bulb” explanation how the Daily Standing Charge and the Unit Price is Calculated, If we take Will explanation the unit price for credit and prepayment customers would be identical and the standing charge would vary for both customers due to the different operational costs involved. If we take your explanation; prepayment customers pay more in unit price and standing charge for operational cost and neither truly reflect the different cost involved in supplying energy and the context of what was said previous in this thread that the promotional offers etc effects the cost of the price of energy.
So which is it?
With regard to the idea customers choose prepayment over credit and are happy with that decision, is absolute rubbish and certainly doesn’t reflect the reasons why most customers have prepayment meters (ppm). The main two factor for customers having ppm are:
(1) They moved into a property that has the ppm installed.
(2) They have become in debt and an energy supplier has either had a voluntary agreement with the customer or received a court order granted for the installation of ppm.
With those main two factors, customer then have to be charged to then have their ppm replaced with credit meters at a cost of £120 (Bulb quoted cost) per meter. Faced with that absolute large cost and the little saving you will get wit the credit meter tariff, would result in either more money spent on energy for replacing to a credit meter or a saving a very small amount on their energy bills, seems lke no choice at all.
I would say customers are happy with bulb not because of their experience of ppm or the illusionary choice they had or have had to be with ppm or that poor sense of control, but, more accurately your customers are happy with Bulb because of the lower prices for ppm tariff compared to other energy suppliers.