On Sun, 21 Nov 2004 22:59:44 GMT, "ARWadsworth"
wrote:

Am I the only person to be asked to increase my gas and electric prices
voluntarily?

I have been offered by BG (my suppliers for both gas and electric) a chance
to increase my electricity bill by 2.25% and my gas bill by 3.5% from their
current prices and they (BG) will fix the price until April 2007(VAT
alterations do not apply).

What is the catch?

Adam



Do you buy lottery tickets at all?

In effect what you are buying with these schemes is a future and these
are traded like any other commodity.

If you go for these, then it enables the supplier to in turn buy
futures of the commodities and hence fix their costs into the future.
This is attractive for them. Of course they can't hedge VAT.

Equally, you can bet that the rates for futures that they will buy
will be more favourable for them than what they are offering to you -
i.e. they will make a margin on the trade.

On the other hand, if you do nothing, you are assuming the risks of
price increases over the period.

So I'd say, if it's attractive to you to hedge against price increases
(assuming use is constant) then these deals might be attractive.
Otherwise you are taking the risk with the market.

Either way, it's worth shopping around and switching suppliers anyway
if you want to minimise cost. It then depends on whether you want
tto invest time to do that.



--

..andy

To email, substitute .nospam with .gl