Fuel bills, direct debits and forecast usage

[Lobster]

I changed energy suppliers earlier in the year (EDF) and pay by monthly direct debit to get the cheapest tarrif. My gas payment has been 52 GBP, and my account is currently 22 GBP in debt.

Today I received my latest bill, informing me that they have reviewed my monthly payments and based on forecast usage (ie over winter) they are going to increase my payments to - get this - 120 GBP.

This strikes me as utterly ridiculous and I fully intend to whinge, but before I start raking out old bills and trying to tease out me winter vs summer gas consumption, does anyone have a rule of thumb as to how these payments are or should be calculated? Maybe EDF are actually on target, though seems unlikely to me?

(I wasn't with EDF last winter so they have no clue as to what my winter usage will be. We use gas for HW, CH, and a hob).

Thanks David

[Terry Fields]

I suspect that EDF don't want you owing them money over the heating season, and have estimated your consumption and decided on a DD figure to keep you in the black.

This will of course lead to them being in an even better position this time next year, should you keep the payments the same.

You might decide that monthly DD isn't necessarily the cheapest option given this scenario, and a variable quarterly DD be more appropriate.

FWIW my gas consumption is 45 percent DJF, 25 percent MAM, 8 percent JJA, and 22 percent SON, so it might be worth digging out those old bills and applying some percentages to them, to give you some idea of how the £120 works out from your POV.

TF

[js.b1]

EDF have an active legal department whose objective is to extract as much as possible from a customer not as determined by existing regulation or case law, but until stopped following a test of their "reasonableness" in a court of law.

You need your previous years consumption. Ideally you need the year previous to that, two hits create two bumps on their thick heads.

You need to work out what you should be paying on the previous year's (and prior to that if available) consumption. That is possible via a basic spreadsheet, and using the calculation to convert gas meter units into kWhr figures.

You thus go on the phone with a figure in mind, which you can justify, plus a reasonable increase in light of the existing debt. You go armed, with the yellow pages between the pages of hard facts :-)

[Michael Chare]

Usually incorrectly. Perhaps not helped in my case because although I have an economy 7 tariff, I don't have any storage heaters, so my summer and winter usage is much the same.

Just recently I got a bill from Scottish Power with a revised payment that I realized was not unreasonable. As the meter has not been read for some time (at least a year), I fed the meter reading into their web site whereupon they promptly demanded a larger payment. I had to ring them and they changed the DD back to the previous amount.

[Nick]

My father always said that a DD is akin to letting someone into your pocket. I didn't understand at the time but have always followed his advice. Pay what you have to pay when you have to pay. There is no sense in giving these people free loans. Just my 2d worth. Nick.

[Vortex5]

" (I wasn't with EDF last winter so they have no clue as to what my winter usage will be. We use gas for HW, CH, and a hob).

Thanks David

With e.on there is a funky online "energy tracker", so you can see your year-on-year consumption.

I have been in the habit of providing monthly readings and the resulting graphs look like this:

round numbers monthly Winter usage is 5-6 time Summer usage for us. (HW and heating only)

D ++

(apologies for the lack of "threading". Windows Live Mail was just automatically downgraded)

[Robin]

It would help give a more precise answer if we knew when you changed: average consumption since January likely to be different from that since August :)

Our gas consumption in Nov-Mar is over 70% of our annual - or to put it another way, we use nearly 3 times as much a month during the winter. So EDF seem reasonable if you started with them in the Spring or Summer. Of course there are lots of other variables: only 2 occupants here so the ratio of heating/HW may well be higher than you may have; and relatively poor insulation (Victorian solid walls and suspended floor not yet done - hangs head).

And of course if you live in the Scilly Isles haven't turned your CH on yet ........

And while I have not dealt with EDF I have FWIW found other suppliers quick to respond if one provides readings which show their DD is excessive. But manifestly a lot depends on how cash flow.

[AlanD]

WTF do 'DJF', 'MAM', 'JJA' and 'SON' mean??

[Chris J Dixon]

How about December, January, February.....

Chris

[Robin]

I could just tell you but since this is DIY I suggest you look at the first hit on

:)

[Dave Liquorice]

They guess as they have no past history.

I've never had a problem getting any DD reduced when it's come in above what I expect but then I have records going back years in a spread sheet so can work out what I ought to be paying at the click of a mouse...

The only real way is to go back to meter readings >12 months ago take readings now and do the maths. This is were a spread sheet is good to calculate the number of days between the readings divide it into the total consumption and multiply by 365 to get an "annual" consumption to then apply the unit cost to, the divide by 12 to get the monthly payment but don't forget anything you owe/owed, standing charges and VAT (@5%).

Southern just screwed up one of my bills but their system caught it before sending it out. Recent meter reading on E7 tarrif but somewhere down the line the two readings got swapped. This would have plonked 70,000 units into the day rate at 15p/unit just over 10 grand and -70,000 units at night rate at 5p/unit, approx =A37,000 bill instead of =A390ish...

[Bob Eager]

I've just moved to E.ON and had a bit of trouble with the initial DD. They wanted £550 a month and I reckoned about £150-£160. They were very good; I suspect that whoever I used to switch (moneysupermarket I think) confused my monthly and quarterly bills. Wasn't me; I just put in my annual usage in kWh.

They cancelled the DD, but that meant paying over 11 months effectively, so they asked me to choose a value. I said £175 and am happy with that...! I had worked out, in advance, a likely monthly value averaged over a year; that was part of the calculations prior to switch.

[Ronald Raygun]

DDs are extremely convenient and with the DD guarantee there is not much reason to be wary of them. They save everyone a lot of time and effort. The alternative is to write cheques and post them, or go to a bank or post office to pay them (or cash) in, or to use standing orders (which have their own problems [*]); there's also direct transfer by home banking, but frankly I find that more of a faff than writing a cheque. DD really is best.

As to free loans, that works both ways (the trick is to join a new supplier just at the start of the cold season, then they will always be giving you free loans). Some people find it easier to budget when they pay a fixed amount each month or quarter, and to have the amount reviewed every year or two, than having to face big winter bills and small summer ones.

[*] The problem with SOs is that while they're fine for annually reviewed budgets, they are not suitable for variable amounts. DDs are suitable for both.

[Man at B&Q]

Oh do sod off yourself.

No, they have lots of data that says if a customer uses X during the previous months then they are likely to use Y during the next billing period.

Depending exactly how many months the OP has been with EDF then the increase may not be totally unreasonable.

That's why it's only a forecast of energy usage.

MBQ

[Man at B&Q]

Most energy suppliers give a discount for DD (or charge extra for other payment methods, which is another factor to consider.

MBQ

[The Natural Philosopher]

similar here on oil..

[Peter Scott]

To be fair (do I want to be?) I think part of the problem is the algorithm used to calculate the payments. It always over-corrects by wanting debits to be paid back too quickly. If you run up a debit it then produces a payment that is much too high, so before long you are well in credit and it then adjusts it too much too, ad infinitum.

Good advice above. Work out your own estimate with perhaps a 10 or 20 % extra margin, then *argue*.

Peter Scott

[Terry Fields]

That happened to me!

I can't recall if it was Powergen or Eon (one was taken over by the other, and I can't recall the timing), but I got a bill for £5800.

Despite letters and phone calls, it took two years to get sorted. I suspect the 'customer service advisers/advisors' binned everything as it seemed too complicated.

Finally, I got through to a young lady called Michelle, and she explained that my bill fell between the old system and the new, and it would take her a complete afternoon to dig out the old records and work out what had happened.

She did this and phoned me back the next day, to say she'd worked it all out and that I was owed circa £250. Result!

I'd have sent her some flowers and a bottle of wine, but didn't know where she was, so settled for saying 'Thanks!".

TF

[Dave Liquorice]

I never actually saw this eronous bill the system spotted it and didn't send it out. B-) All I got was a snail mail letter that looked suspiciously like a phishing attempt, until I read it properly. Tried to file meter readings online but it wouldn't let me, niether would their automated telephone meter reading service ended up talking to a someone who took my readings then said the online ones had gone through anyway...

Sometimes it is a shame that one can't really thank a customer services person properly when they do a good job for you. It's a thankless task handling peoples compliants all the time and quite probably being verbally abused several times a day.

[Ericp]

Snap.

My settlement bill came in three weeks ago. I owed £30, so I was a few % out. My spend is £75 a month. Our usage has been largely static for some years.

They gave a long justification and told me my november spend was £122.

Uswitch compounded the situation by showing me that the same company could have reduced my bill slightly by simply recommending a different plan.

I simply solved the probleem by switching entirely to another company.

Now we are bombarded every day with letters and phone calls asking us to reconsider.

Each gets the same answer. If you had bothered to point out the other plan and had not tried to screw me then we would still be in business.