price increases

Bulb took over my supply only THREE DAYS ago. Virtually its first action has been to tell me that there is likely to be a price increase in August “due to a rise in wholesale energy costs”. I would like Bulb to answer the following questions ----

  1. It says its supplies are from 100% renewables (though presumably this relates only to electricity). The cost of oil and gas is currently rising, but why does this have any effect on the cost of renewable electricity? Will Bulb confirm that its warning about rising prices relates only to gas?
  2. Standing charges have nothing to do with wholesale energy costs, so can Bulb please confirm that there will be no increases in standing charges for either gas or electricity?

I have no doubt Bulb will respond, however I take the view that it is the total cost of Gas/Elec compared to others on the market that counts. After the last increase I ran a check on compare the market and Bulb were still cheaper.
Some have cheaper fuel and more expensive standing charges others the reverse.

I would like to echo the concerns expressed by Trevor_G1 above having also joined recently. Bulb’s electricity is from 100% renewable sources and I believe 10% of its gas is sourced from renewable sources too.

I joined for two main reasons, 1. because I want to be sure that as much the energy my household consumes as possible is sourced responsibly from renewable sources & 2. because Bulb’s rates were competitive in the market. I understand that it is a variable tariff and therefore prices can vary but with an already high standing charge on both electricity and gas, one would hope that this doesn’t rise and cost increases can be kept as low as possible because my concern would be that people, myself included, would be willing to pay up to a certain level “premium” for renewable energy, but not beyond a particular threshold. I’m sure this is being borne in mind.

@Trevor_G1 thanks for bringing this discussion to the table, and thanks for your interest too @R_Burn. Can I point you in the direction of our recent blog post to answer your questions? But, please comment here if anything is not covered or you would like to discuss in more detail.

This is just a market update, and today’s email was just to keep everyone in the loop, nothing is decided yet. When we increased prices at the end of April due to increased wholesale costs, there was only an increase in the unit rate and the standing charge remained the same.

As always, we will give you 60 days notice of any price rise, and we have no exit fees if the new tariff is no longer a good deal for you.

@“Owen at Bulb”

I received the email about price increases and read the blog too. It said that costs of energy had soared by 13% because of the long cold spell. This leads me to think that as the weather was so cold, and for an extended period, people had their gas and electricity on for much longer than usual so I would have thought that customers bills would be considerably higher than normal which would have boosted Bulb’s profits quite a lot which then seem strange why the bills are going up again. .

Bulb seems to me to be totally upfront in their communication. The email from them today said wholesale energy costs are increasing and not that that Bulb prices are increasing. If prices were to increase then they would give us 60 days notices with no exit fee this seems to be extremely fair. Don’t forget at any time you can carry out a price comparison check of Bulb against the competitors, this will factor in the equation any standing charges. From my personal experience higher standing charges by Bulb were/are countered by the lower unit cost of their kWh. Unfortunately whenever there is a price increase inevitable it will be just after some customers have joined Bulb, this is purely a coincidence.

Unfortunately whenever there is a price increase inevitable it will be just after some customers have joined Bulb, this is purely a coincidence.

…and does anyone think that if wholesale prices stay at a higher level that other suppliers won’t have to raise their rates too?

Where does bulb get its wholesale numbers from and could you publish a chart (or link to it)? The chart at http://www.energybrokers.co.uk/electricity/historic-price-data-graph.htm doesn’t appear to agree with the blog.

Unfortunately the email encouraged me to look at comparison websites. I’ve found an energy company with a 12 month fixed tariff that will save me approx £100 over a year on current Bulb prices. I love the idea that Bulb only provide clean energy and it pains me to leave but i cant afford to pass up the savings

@steve1905 Higher consumption doesn’t really correlate to increasing our profits, we have to buy the elec/gas you consume and when the usage is above expectations, we have to buy more electricity to cover the excess or vice versa when usage is below expectations.
Our profits would be highest when our prophecies are most accurate and we buy the correct amount.

@Allanr and @198kHz Thanks for taking our notice in a wider context as we are absolutely subject to the same conditions to the rest of the industry, just trying to be the most transparent in the industry.

@bh27 These are HH prices rather than Quarter/Seasonal prices that we would be purchasing, these prices show you the crazy spikes over the last few months due to cold spikes. These spikes fed into the contracts we purchase as they lead to concerns of demand being higher to stock our gas reserve, which then drive up prices.

Here is a better chart and link to use:

https://www.theice.com/products/910/UK-Natural-Gas-Futures/data

@flec03 Sorry to see you go, totally understand leaving if you can get saving.

Bulb are supposed to be energy suppliers based on renewables, you should have a strategy to deal with shortages. You should also not blindly follow the big 6 suppliers whenever they put their prices up. You pride yourselves on being different… well - be different not the same as all the others.

Three price rises and seven reductions since 2015 not different enough?

@Dynamo All suppliers have to buy energy off the wholesale market. No matter what source, wind, coal, gas, solar, it all ends up in the wholesale market at the same cost. Therefore gas prices increasing effects the cost of the rest of the market. Equally renewables becoming cheaper will bring down the cost of energy.

Here is a graph of our price changes since we have started:

I’m not going to quible over whether the price increase is reasonable, but I do wish Bulb was better, and more transparent, at communicating it. My particular bugbear: the graph below.

In this graph the wholesale cost of energy and annual bill have the same units (£/year). There is NO justification for then displaying them on separate scales. By starting the scale for the bill £520 higher, the casual observer might conclude that Bulb’s prices are so reasonable there have been times (March '18) that energy has been sold below cost price. This obviously isn’t true. Drawing the graph correctly, using the same scale for both figures, would show clearly that Bulbs gross profit per account is around £500. Nothing wrong with this (after you’re still cheap) but don’t try and obscure it either.

The above post mentions a gross profit of £500 per bulb account. What it fails to take into consideration is that the wholesale cost of energy makes up a small proportion of the typical bill- the graph suggests about 40%. To the cost of energy, bulb have to add distribution costs from the national grid, various climate change levies, taxes, administration costs etc. The energy market is a competitive one, with hundreds of suppliers- if anyone was making £500 per customer they wouldn’t last five minutes - another supplier would be delighted to make half that and cut prices accordingly!

I firmly believe that bulb are ethical and treat customers brilliantly. They have put prices down as well as up, and communication about rises is always excellent. There are no penalties for leaving if you’re not happy, yet still they remain one of the cheapest on the market. No one enjoys price rises, and I am sure bulb will have taken the hit for as long as they could. I don’t begrudge them a modest profit, I’m quite sure it is only a tiny fraction of the £500 per customer suggested!