The cost of electricity is a serious issue we're currently facing and one we are trying to support you all with. We have had many of you expressing understandable frustration over the price set at 0.75ppu. For absolute clarity and transparency, we feel it would be best to share with you what's really going on...
As you know, our contract with Yorkshire Gas & Power was due to come to a close on the 1st October 2022. The rate with YGP including VAT & ccl, was 0.21ppu which was agreed back in 2019.
(Picture: YGP bill)
We went out to tender in August 2022 for a new contract at unfortunately, the worst possible time for the market. As our contract was due to end on the 1st of October, we were threatened with falling into out of contract rates which would be around the £2ppu mark.
In our blog post on the 12th September, we shared with you the combination of factors which had led to the astronomical price increases.
In 2021, the market was selling electricity at 13.66pkwh. It is [now] between 90-1.05pkwh - that's a 592% increase! These prices are made up of commodity costs & government levies.
Another factor is that in the U.K alone, 47% of our electricity is generated by gas. Gas is supplied from either Nordstream or the North Sea, but since Russia closed off its supply to Europe, those customers have moved from Nordstream to the North Sea pushing up the price even further.
Our original electricity contract was locked in 2019, therefore we have managed to avoid the increases that the market has been suffering since the impact of Covid-19; However, it has sadly caught up with us.
On the 1st of October, we set the bollards to 0.55ppu following advice from our broker on the amount of government help we were forecasted to receive. That changed on the 25th of October following the chaos in government and the change in government budgets. The bollards were then set to 0.75ppu as the help forecasted had been cut although, they still couldn't tell us exactly what the help would be!
As you can see, the bill for October & November combined is £61,816.42 including VAT. In October, the usage was 26063 units. In November, our usage was 25144.50. Combined, that's 51207.50 units.
£61,816.42 / 51207.50 units = £1.207 (£1.21)ppu. This means, as we explained in September, the price per unit is £1.21.
It has today been confirmed to us that the government help will only be 0.21ppu.
This means that unfortunately we will need to put the prices up again to £1ppu until April 2023.
It also means that between 1st October - 25th October, we undercharged all berth holders by 0.45ppu. Between the 25th October - 1st December, we undercharged all berth holders 0.25ppu. To put that into monetary terms, 26063 units used in October at -0.45p = -£11,728.35. As we resell around 25% of our usage to berth holders, we have carried just under £3000 of berth holders usage that month.
In November, there was 25144.50 units used at an undercharge of 0.25ppu, we carried £1,571.53.
I hope you can now see that we really have been hesitant to increase the prices and have carried the weight of this issue for as long as we possibly can.
We will be going back out to tender in October 2023 when the market will have restabilised and we can get a much more reasonable price per unit which will of course be reflected back to