To fix price or not to fix price – that is the energy question

iStock_000004485422MediumI’ve just spent the last couple of days working out whether I should switch to a new fixed price tariff with my energy supplier EDF.
The big issue was finding the time to do the maths and getting the right EDF representative on the end of the phone to run through the options I’d shortlisted in brain numbing detail.
I’m not beyond politely terminating a call and ringing back a little later in order to get another person on the end of the phone. This holds true for all sorts of phone conversations, not just those with energy suppliers. Some people are more patient than others. Some people are… nicer. You may get somebody just before then end a long and wearying shift, or somebody full of energy at the beginning of their day.
The first person I got through to was helpful but wasn’t really interested in me going through the pros and cons of each option in excruciating detail (as is my way). He basically said my existing deal was fine and I should check again when that deal was up in June of this year. He wanted to deal with the call in very black and white terms. Basically, I was currently paying less than I would do if I switched to one of the other deals on offer. End of conversation.

But life is rarely that simple. Let me explain…

The name of the energy game at the moment is predicting the best fixed price deals over the life of the deal. The per kilowatt hour price may be slightly higher to start with but you’re banking on energy prices rising over the duration of the fix so you pay less in the long term.
There are a couple of new fixed price deals with EDF at the moment. (I took the strategic decision to start out by exploring a ‘better’ deal with my current supplier before considering moving.) My existing deal came to an end in a few months and the two new deals stretched until 2015 and 2017 respectively. In both cases I would pay more for my energy than I currently am but I am taking the view that energy prices will continue to rise, whatever various political parties might have to say about tackling them.
Plus, I had prepped for the call:

  • I’d gone online to the EDF website and logged in to my account so I had details of my gas and electric usage.
  • I had my annual energy statement which breaks that usage down and predicts my future usage.
  • I had my latest meter readings.
  • I’d done some research about what the pundits and energy experts think will happen to energy prices in the short and long term.
  • I’d looked at competitor deals and not simply relied on EDF’s published promise to tell me if there is another tarriff (include tariffs with competitors) that could save me money*.

* Firstly, EDF only contact me when the saving is more than £1 – that’s £52 a year. The reality is I might like to know about a smaller saving. Secondly, cheaper is not always better. Some of the cheapest deals are with companies that have dreadful customer service reputations. I always check out independent customer review sites and industry regulators for this sort of information.
Thus armed, I needed somebody from EDF who could deal with my call in great detail and maybe with a little empathy. I called again and this time I got (we’ll call him) Fred.
Fred was a very different cup of tea and completely got my dilemma. I ran my scenarios and he listened. We crunched the numbers together. I asked an awful lot of questions. He remained resolutely patient.
In the end I opted for the 2017 deal. The clincher was the fact that I can opt out of the deal at any stage. Okay, if energy prices fail to rise that means that I will have spent a few pounds more each month. But if energy prices fall or a better deal some along I can still switch. But if I’m  right, my initially higher outgoings will start to balance out and I could actually show a reasonable saving.
At this stage I have to stress that everybody’s perspective is different. Just because the numbers worked for me doesn’t mean they work for you. If you’re a money fighter you have to do you own calculations and research. But at the moment I’m permitting myself a warm rosy glow of contentment.

I think next I’ll tackle my mobile phone contract…