Do you want to know more about changes in our prices?

  • 10 February 2017
  • 31 replies
  • 12812 views

Userlevel 5
Badge +2

Energy is a complicated business (but that’s a different story!), and the price you pay is based on a lot of factors. We’ve outlined this in a great OVO Answers page which you can find here.

The biggest factor is the wholesale cost of your electricity and gas, and we base our pricing on any changes to the costs we incur. This is called cost reflective pricing. We think this is the fairest approach, but what do you think? Could we be clearer in why our prices change?

31 replies

Userlevel 7
Badge +2
Hello OVO, like LiamW I think you need to explain how you can justify a 30% increase in prices. As much as I like the convenience of your internet service and the community forum, that may not be sufficient to retain me and a lot of other customers unless you can provide a fuller explanation of what is going on in the market place and where you sit against your competitors. If you can't or won't then you will drive people to the comparative sites and you end up just another commodity company.

Hi @Billred,

Fair do's , but check out my comment above. It specifies wholesale cost increases and gives a cheeky suggestion for how some suppliers can offer tariffs that seem to contradict these increases. With a potential price cap for those standard variable tariffs, this might change things!

Tim
Hello OVO, like LiamW I think you need to explain how you can justify a 30% increase in prices. As much as I like the convenience of your internet service and the community forum, that may not be sufficient to retain me and a lot of other customers unless you can provide a fuller explanation of what is going on in the market place and where you sit against your competitors. If you can't or won't then you will drive people to the comparative sites and you end up just another commodity company.
Userlevel 7
Badge +2
I am wonderimg why unit costs have risen so drastically for the next 12 months. I joined Ovo and remained because they were so competitive. I now find that i can save a lot of money transferring to EDF. I understand the rise im wholesale prices, but cannot fathom why your increase is so much more than the so-called larger providers. Standing charge is not the issue... your comparative rate per unit taking that into account is still significantly higher. Much as I have no desire to leave, sentiment is no reason to remain. Can you please explain the price hike?

Hi Liam,

Thanks for getting in touch about this.

It’s true that our prices have increased over the course of 2016/17. This price change reflects a progressive upward trend in the wholesale commodity price of both gas and electricity. For example, since 10th June 2016, the forward price of gas has increased by 23% and electricity by 30%. Cost reflective pricing means we pass this increase on to our customers, across all of our tariffs.

What some suppliers might do is offer loss-leading tariffs to entice new customers, and subsidise these losses by charging high prices for their customers on standard variable tariffs. That’s not the OVO way, so we keep it open, honest, and we hope for wholesale costs to drop.

As it’s a good question, I’ve moved this to another topic on price, not specific to just Pay monthly users.

Hope this helps,
Tim
Userlevel 1
The 2 year fix doesn't say whether it is green or not - just that it is a fix. Can OVO clarify please?
Userlevel 1
I've seen the "change to a 2 year plan" offer too. It's actually a difficult decision. I get that energy prices are Up at the moment, and that a fixed rate plan is the way to go. I renewed onto a 1 year plan in December, and got in before the recent round of price rises, but it feels oddly like Gambling, in a strange way. If energy prices continue to rise as they are right now a 2 year plan makes sense, but no-one Really knows what's gonna happen beyond a few months. I could be left behind if prices drop again...

My question is, How long is this Free Switch to 2 Year Plan offer going to be available? If I wait to see how things go price-wise until later this year, might I find the offer has been withdrawn?


In all honesty, stateofit, we don’t know. We think it's a great idea for customers to fix their energy for longer, so we’re hoping to be able to offer it for a while but as with all pricing related matters, changes in the energy markets could make it unsustainable for us for keep offering it (but we hope not!).

We like being able to offer it and like that customers are interested in it, but it would be wrong of us to make any promises, because we really don't know and don't want to disappoint customers.

Hope this helps,
Lucy
Userlevel 6
Badge +4
I am wonderimg why unit costs have risen so drastically for the next 12 months. I joined Ovo and remained because they were so competitive. I now find that i can save a lot of money transferring to EDF. I understand the rise im wholesale prices, but cannot fathom why your increase is so much more than the so-called larger providers. Standing charge is not the issue... your comparative rate per unit taking that into account is still significantly higher. Much as I have no desire to leave, sentiment is no reason to remain. Can you please explain the price hike?

Hi @LiamW and thanks for posting on the forum.

From what I've seen on other posts: unit prices and increased vary depending on where you live, so the best way to get a more detailed explanation would be to drop either @Lucy_OVO @Tim_OVO or @Darran_OVO a private message with your full name, address and OVO account number and they will look into it for you.

Hope they can help you shortly with an answer
I am wonderimg why unit costs have risen so drastically for the next 12 months. I joined Ovo and remained because they were so competitive. I now find that i can save a lot of money transferring to EDF. I understand the rise im wholesale prices, but cannot fathom why your increase is so much more than the so-called larger providers. Standing charge is not the issue... your comparative rate per unit taking that into account is still significantly higher. Much as I have no desire to leave, sentiment is no reason to remain. Can you please explain the price hike?
Userlevel 5
Badge +2
I have been an OVO Customer since 2010 and my contract is due for renewal in June 2017, I am afraid the 29% plus price increase for gas and electricity is to much for me, I have already looked around and there are companies offering the same energy for much less, so it is goodbye OVO for me next month.
Oh and by the way do not be fooled by the smart meters, my close friend has one, the gas part of the meter switched the gas off on Christmas Eve, so no heat or hot water for 5 days over Christmas, he was paying £12.99 a month for maintenance contract for gas and electric, they showed up as promised but could not touch the meter.


Ahh, such a shame to hear this, @Mr Dickson but we wish you all the best with your new supplier. If our prices become more competitive for you in the future, we’d love to have you back!

I’m not sure what happened with your friends smart meter - are they Pay as you go or Pay monthly? There are loads of benefits to having smart meters so I wouldn’t let this put other people off having one installed. 🙂 For more information, check out this OVO answers link: https://www.ovoenergy.com/ovo-answers/topics/smart-technology/smart-meters/what-are-the-benefits-of-smart-meters.html.

Lucy
I have been an OVO Customer since 2010 and my contract is due for renewal in June 2017, I am afraid the 29% plus price increase for gas and electricity is to much for me, I have already looked around and there are companies offering the same energy for much less, so it is goodbye OVO for me next month.
Oh and by the way do not be fooled by the smart meters, my close friend has one, the gas part of the meter switched the gas off on Christmas Eve, so no heat or hot water for 5 days over Christmas, he was paying £12.99 a month for maintenance contract for gas and electric, they showed up as promised but could not touch the meter.
This is the article that made me ask my question, https://www.theenergyshop.com/advice-guides-energyInflation, turns out it's a site recommending shopping around and of course doing so using their quote engine. But I found it chilling that the ever increasing prices are thought to be the fault of loyal customers! With the government suggesting capping the rates of loyal sitters, then they won't switch. So no more free market? I remember at school learning about the overriding benefit of free markets ( google Adam Smith' ) it's why I left BG and came here ( on a recommendation). Just as I left BG, they found they'd 'forgotten' to charge for my electricity for six months. I checked, it was actually true. It had made my DD seem 'not so bad'. But the truth was that I had been a "sitting cash cow". I saved hundreds coming to OVO.

But does a free market demand that most of us must never be loyal to just one supplier? We might as well use energy brokers - but surely isn't OVO also shopping around for energy at the best price and passing the benefit on to us? Or are there one or more "cartels" such as OPEC, in the wholesale energy market artificially controlling prices? If so energy users shopping around will only have a limited effect, and the government would not then be targeting the most powerful players, and so will fail to help create a truly free market.


@Fjowls, @atilagiant, @SianiAnni: Any of you techy lot have any thoughts on this? :?

Tim
Interesting that the market price is driving the increase, the electricity I feed into the grid pays me 3.57p per kWh the new tariff proposed if I lose half of my current fixed period and go for two years is 15.28p per kWh. So distribution overheads and profit seem to be the main cost in the equation. Plus of course the dreaded standing charge, which I guess funds the smart meters.

My best solution may be local storage instead of feeding the grid to use when the sun is not out.
Userlevel 7
Badge +2
This is the article that made me ask my question, https://www.theenergyshop.com/advice-guides-energyInflation, turns out it's a site recommending shopping around and of course doing so using their quote engine. But I found it chilling that the ever increasing prices are thought to be the fault of loyal customers! With the government suggesting capping the rates of loyal sitters, then they won't switch. So no more free market? I remember at school learning about the overriding benefit of free markets ( google Adam Smith' ) it's why I left BG and came here ( on a recommendation). Just as I left BG, they found they'd 'forgotten' to charge for my electricity for six months. I checked, it was actually true. It had made my DD seem 'not so bad'. But the truth was that I had been a "sitting cash cow". I saved hundreds coming to OVO.

But does a free market demand that most of us must never be loyal to just one supplier? We might as well use energy brokers - but surely isn't OVO also shopping around for energy at the best price and passing the benefit on to us? Or are there one or more "cartels" such as OPEC, in the wholesale energy market artificially controlling prices? If so energy users shopping around will only have a limited effect, and the government would not then be targeting the most powerful players, and so will fail to help create a truly free market.


@Fjowls, @atilagiant, @SianiAnni: Any of you techy lot have any thoughts on this? :?

Tim
This is the article that made me ask my question, https://www.theenergyshop.com/advice-guides-energyInflation, turns out it's a site recommending shopping around and of course doing so using their quote engine. But I found it chilling that the ever increasing prices are thought to be the fault of loyal customers! With the government suggesting capping the rates of loyal sitters, then they won't switch. So no more free market? I remember at school learning about the overriding benefit of free markets ( google Adam Smith' ) it's why I left BG and came here ( on a recommendation). Just as I left BG, they found they'd 'forgotten' to charge for my electricity for six months. I checked, it was actually true. It had made my DD seem 'not so bad'. But the truth was that I had been a "sitting cash cow". I saved hundreds coming to OVO.

But does a free market demand that most of us must never be loyal to just one supplier? We might as well use energy brokers - but surely isn't OVO also shopping around for energy at the best price and passing the benefit on to us? Or are there one or more "cartels" such as OPEC, in the wholesale energy market artificially controlling prices? If so energy users shopping around will only have a limited effect, and the government would not then be targeting the most powerful players, and so will fail to help create a truly free market.
post deleted, see below
Userlevel 7
Badge +2
Does anyone know of a scholarly article on how supply and demand aren't sufficient to explain why energy market prices always climb?

Hi Logie,

I've moved your query to another topic on prices changes. This will give you the best chance of other users seeing it and getting involved!

Tim
Does anyone know of a scholarly article on how supply and demand aren't sufficient to explain why energy market prices always climb?
Userlevel 5
Badge +2
I'm getting the '2 year fixed rate plan' offer when I give my meter readings. The webpage says that my monthly dd payment will increase from £70 to £74. I've worked the new prices through a couple of recent bills and I get an increase of 14% on leccy and 10% on gas. How can you claim that my monthly payment will only increase by £4 which is around 6% ?

The proposed Direct Debit increase will be more reflective of your consumption, but will also factor in the new rates. This will help explain why the monthly payment has only increased by £4.

Lucy
I'm getting the '2 year fixed rate plan' offer when I give my meter readings. The webpage says that my monthly dd payment will increase from £70 to £74. I've worked the new prices through a couple of recent bills and I get an increase of 14% on leccy and 10% on gas. How can you claim that my monthly payment will only increase by £4 which is around 6% ?
Userlevel 7
Badge +2
Hi there ,have ovo increased there prices as when I first joined last year my payments were a little cheaper than my previous supplier I also bought a salus it 500 wireless thermostat so when I'm out of the house I can turn down heating ect....
Well that's the only good thing I can say about ovo as now my gas usage is ridiculous,it higher than I have ever used with any supplier with house temp at 18c ,same goes for electric which is worse ....ps I live in a very small 3 bedroom house which has insulated top to bottom ...last 3 days been very warm weather so I turned off the central heating in those 3 days it said I HAD USED £21 GAS ...ESTIMATED FUEL USAGE £1900 YEAR SOMETHING IS WRONG


Hi stobbsie

First off, thanks for posting on our forum. I have moved your topic here onto this thread as other users have already asked questions about our pricing and any changes, so hopefully you will find this useful in terms of answering the questions you have.

Some of our other users may also have comments etc on this that they want to share, if not, we will do what we can to help.

Darran
Hi there ,have ovo increased there prices as when I first joined last year my payments were a little cheaper than my previous supplier I also bought a salus it 500 wireless thermostat so when I'm out of the house I can turn down heating ect....
Well that's the only good thing I can say about ovo as now my gas usage is ridiculous,it higher than I have ever used with any supplier with house temp at 18c ,same goes for electric which is worse ....ps I live in a very small 3 bedroom house which has insulated top to bottom ...last 3 days been very warm weather so I turned off the central heating in those 3 days it said I HAD USED £21 GAS ...ESTIMATED FUEL USAGE £1900 YEAR SOMETHING IS WRONG
Userlevel 5
Badge +2
My fixed rate (Better Energy Online) finishes at the end of April 2017. Ive just checked my account online and found Ive been moved over to a Standard Plan already and its only the 3rd April.. Why?

Hey Lala,

Your fixed plan shouldn't come into effect until your current plan has ended. If you’d like us to check what’s happened on your account, feel free to send one of the Moderators a PM with your name, DoB and OVO account number.

Lucy
My fixed rate (Better Energy Online) finishes at the end of April 2017. Ive just checked my account online and found Ive been moved over to a Standard Plan already and its only the 3rd April.. Why?
Userlevel 7
Badge +2
As i pay in advance for my energy why should I pay a higher tariff then people who get their energy on credit .ie they use first and pay later . Seems back to front to me .

Hi Geezer,

Great question - I've moved it to another topic, to keep pricing queries in the same place.

The prices you pay (and how they compare with other payment methods) will depend on the tariff chosen. We offer all Pay as you go customers the best prices we can, depending on the costs we face at that time. It differs from the Pay monthly set up in lots of ways, as do the costs. This is explained in more detail here.

Tim
As i pay in advance for my energy why should I pay a higher tariff then people who get their energy on credit .ie they use first and pay later . Seems back to front to me .
Userlevel 7
Badge +2
Having just got caught by signing up for Robin Hood energy and then find that they have just put the tariff up by over 20% (NOT the 17.5% they try to claim) so I am now interested in switching to OVO - however, can anyone tell me when OVO last put their rates up please?
Don't want a repeat of the RH shambles!,
Many thanks,
bartholomew10


Hi Bartholomew,

This has been raised in an older topic, so I’ve moved your query over to make it easier for other users to find.

You can find info on what our price changes are based on above, but as for when our last price change was, this depends on the payment type and tariff. To view our latest prices, check out this page: http://ovoener.gy/Quote.

Tim

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