Energy price rises for some on this group in January

On 5 December I received a printed invoice for my electricity bill, but it said please pay by 2 December. I usually pay my bills online, and when I went to my account it said I had about £65 surplus. Eventually I discovered that payments are being added to my account, presumeably from the Government, so as I had already paid the bill as printed I now had an extra payment which I can rollover to the next bill.

RM strike delaying mail? Yesterday I received a small second class package yesterday that was posted on 21st November!

I usually pay my bills online,

Yes, it's the Government (aka your returned taxes) payments being automatically credited to your account.

But this is not the point of the thread. For the same usage of energy are you paying more than someone who pays by DD - possibly £260 more per year for the notional UK average consumption?

But if you are set up to pay on receipt, you will pay more...

Dave

"The Government has said that the Energy Price Guarantee will cost £25 billion in its first sixth months and a further £13 billion in 2023-24. The Energy Bills Support Scheme is expected to cost £12 billion in 2022-23."

This is being added to the national debt. It isn't *your* taxes being returned, it is the *additional* tax that future generations will be saddled with to pay it off.

I don't get what you mean, I'm on a fisted rate till 2024. Are you saying that rather than being able to up the rate, they are giving everyone a surcharge for actually having a direct debit? Not sure that is legal. Brian

I went paperless years ago, mainly cos I cannot read them, but have always paid quarterly on direct debit on the reading, and now of course on the reading on the smart meter. They need to be more clear. I never did agree with non bill validated payment, why should they have my money to invest when I've not spent it yet? All the ads say that we should monitor our use and the whole idea of that is so that we only pay what is owed and have a good idea of what that is before we see the direct debit. I've never understood these folk who are quite happy to pay the same each month so that in the summer the company has a lot of your money. If a company cannot have a business plan that allows them to survive on the amount billed then they should not be running a company. Brian

There are two unit rates, one for paying by direct debit, and one for 'standard credit, ie paying on receipt of bill. The difference is baked into the tariffs. The 'receipt of bill' method is about 5% more expensive in unit price than direct debit.

From 1st January the 'average' London consumer will pay: Direct debit: gas £2071.05 electricity £2167.46 total £4238.51 Standard credit: gas £2193.62 electricity £2295.30 total £4488.92

Difference £250.41

So by not having a direct debit you are paying an extra £250 for average consumption, and the more you use the more extra you'll pay.

Data:

Theo

Are/were there any cheaper fixed price deals in the past that didn't require a DD payment method?

the reverse it's just adding to the existing surcharges for other means of payment.

The surcharge, and the January increase in surcharge, is for those who don't pay by direct debit and also for those where the collection of money cost a lot more than direct debit such as pre-payment meters.

The price cap for gas and electricity will rise by around 20% in January but the Government will make up the difference between the October price cap and the January price cap and those paying by direct debit should see no changes in January.

In April 2023 price caps will be £3K rather than £2.5k (for the notional average consumption). I don't know about fixed price contracts but I guess that if your fixed rate at the time you started your contract is still above the capped rate in January then your prices will also rise by 20% (or to a level you agreed at the start of the contract).

ROFL. That was entire business model of all the minnow companies that have now gone phut Brian.

They advertised a headline lower tariff and sucked in loads of customers but forced them to set up monthly direct debits which the customer had no control over. Then they slowly ramped up the monthly payments which they could then could then literally do what they wanted with. Amazingly these companies were not even required to keep customers credit balances in ring-fenced accounts. What these switchers didn't realise that the actual price/KwH they were paying was the excess DD they were paying, not what they were actually using (much less).

Few if any of these companies had any sort of hedging mechanisms to cover any short term volatility and this was their downfall. A couple were forced out of business because they were not paying across the 'green' tariffs they were collecting.

Take Avro as a typical example of the shady business practises that they could engage in because customer credit money was not protected

I saved thousands over the years I switched to cheaper suppliers. I could have requested any overpayment back at any time but putting it in an instant access account to pay the next bills would have returned pence in interest.

I didn't loose my credit balance when the company I was using went under.

It seems that it's not just the companies that went bust that adopt this practice and the utility companies still in existence are still holding billions in customer credit.

Yes that is why the price cap should now be scrapped - all the shady companies have gone out of business and the the good run companies have all covered the short and long term volatility s no need for price support.

I assume that you are not a customer of a utility company that was doing the same at the time, and still doing the same?

Of course you lost your credit balance. The supplier that Ofgem moved you to, re-created your 'credit' and was then allowed to recover all of these lost credits (the failed company did not ring fence the customer money and were bankrupt - i.e. no money) by wacking UP the daily7 standing charge for all of their customers, and Ofgem have admitted that this is what they have agreed to.