Estimated bills and price rises

dandelion_wine

My apologies if this is old hat, I have had a quick trawl and not spotted similar.

NPower put their prices up on 1st January (as most companies have done lately). They sent me a statement on 4th January where they grossly underestimated my usage. Normally, I don't worry about such things because I'm on direct debit and it sorts itself out when the meter is read.

However, because of the price hike, it meant that about half the gas I had used in the last quarter of last year would have been charged at the new 2006 rate. I thought that this would be easily sorted with a revised reading, however they simply treated the extra gas as having been used in the seven days between their estimate and my actual reading, and billed it all at the higher rate.

Needless to say I queried this and after considerable persistence, got them to revise the whole bill, saving about £7 on £160 usage. This is not a big saving, but if the practice of underestimating around price rises is common, it could be netting them a small fortune.

It is worth watching estimates around this time of price hikes as underestimates could be expensive.

IvanOpinion

Different companies work in different ways depending on their computer systems. Remember an estimate is just that .. the computer tried, using whatever data it had to estimate what your meter would have read at the time of the price change and charge you those units at the lower price .. it just sounds like their algorithm has missed a trick.

It is good advice to tell people to keep an eye out for this and you will find the call centres are usually helpful

Ivan

Cardew

There have been a number of threads about just this subject.

A number of people have commented that estimated readings have always worked in the Utility conpany's favour. Obviously the computer system is dependent on an algorithm; but I wonder who writes the algorithm he says cynically!

I wonder what percentage of consumers would pick up on this point - very few I suggest.

IvanOpinion

Cardew wrote:

A number of people have commented that estimated readings have always worked in the Utility conpany's favour. Obviously the computer system is dependent on an algorithm; but I wonder who writes the algorithm he says cynically!

I do

I worked on the algorithm for one of the power companies (not willing to say which). It is not designed to be in anybodies favour .. it is designed to apply a set of rules to calculate a reading as accurately as possible. However it is just an estimate. The problem is if you estimate high then people phone complaining that they are being asked to pay in advance. If you estimate low then people complain when they get an bill base don actual readings.

The main driver is to STOP customers having to phone the call centres .. because that costs money ... therefore it is preferable to make it as accurate as possible and (if in doubt) in the customers favour.

Ivan

rayhool

How did you get them to discount it as they are telling me they won't because I should have rung them with a meter reading before the new year?

dandelion_wine

rayhool wrote:

How did you get them to discount it as they are telling me they won't because I should have rung them with a meter reading before the new year?

They tried that with me. I asked them if they had told people that they needed to do this. They hadn't. I then quoted the back of the bill where it asks us to send in correct readings if it is estimated and said that it was a reasonable expectation that this would result in a recalculated statement rather than an additional one. I suggested that they were probably making a lot of money out of this practice and that I would readily go to EnergyWatch. It is completely reasonable for them to estimate the split between the old rate and the new based on the date of an accurate reading and I do not think they could come up with any justification for doing otherwise.

IvanOpinion may have misunderstand my point here. I am not worried about the inaccurate estimate though I suspect some people may not spot the cost implications and I normally expect estimates to be out.With stable prices, the only implication is who gets the interest. My main problem with the company here was that when I sent in a revised reading, they charged all of the unestimated usage at the new higher rate. Effectively, they were trying to predate the price rise.

IvanOpinion

dandelion_wine wrote:

IvanOpinion may have misunderstand my point here. I am not worried about the inaccurate estimate though I suspect some people may not spot the cost implications and I normally expect estimates to be out.With stable prices, the only implication is who gets the interest. My main problem with the company here was that when I sent in a revised reading, they charged all of the unestimated usage at the new higher rate. Effectively, they were trying to predate the price rise.

That is why I said they missed a trick. I have worked on estimation processes that take into account profiling thereby attempting to determine the most likely time of the usage. These profiles consider various parameters which may include time of year, type of metering, type of premises, type of tariff etc. Normally when the rebill occurs it should ignore estimated readings and use the estimation process to recalculate the readings based on the supplied actual.

From what you are saying it looks like it has continued to use the old estimated reading hence why it was all charged at the later price (there are other reasons as well .. maybe they do not use profiling, maybe a reading had been labelled wrongly etc.). This may have been deliberate because pre-1998, when many of these systems were developed, people were seeing the price going down and therefore the system was actually written to provide the maximum benefit to the customer however they may have forgotten what would happen when the price starts to rise.... oops!

But as I said contacting the call centre is the correct thing to do

Ivan

koru

I had just spotted the same problem with my bill, which arrived today. Curiously, Scottish Hydro (part of Southern) seem to have the same mysterious gross underestimation problems as NPower.

In my case, they estimated usage for the last 3 months as 286 units, which is lower than any sensible algorithm could have estimated. They know that I used 272 units for the 35 days to 18 April 2005, so I am hardly going to use the same amount in nearly three times as many days in the middle of winter. I actually used 957 units - more than three times as much.

I think it is worse than the original poster said. I think they are deliberately underestimating, so that they get to charge most of the usage at the new rate, next bill. I am on DD, so it doesn't affect their cashflow from me, but it means I pay an extra 10% for most of the gas I used in the last 3 months.

I am going to report this to Ofgem, in case this is widespread. (Edit: Energywatch, not Ofgem.)

beemuue

I received my bills for gas and electricity from Scottish Hydro on 21.01.06 dated 19.01.06 following a meter reading taken on 09.01.06.
I did take the precaution of taking readings on 01.01.06

Both bills calculated the charges for the whole of the billling period -from 19.10.05 -at the rate which came into effect on 01.01.06. A mail via their site five days ago has received no reply ( 'We aim to reply in two working days')


The difference between the actual usage, charged at the correct tariff, and the bills received is £29.32. You will have guessed that the error is not in my favour.
I have mailed them again today gently requesting an amended bill and explaining that I have absolutely no intention of paying the existing demand.

Always check your bills.
( Why is it that in the days when a man came round with a ledger you got the bill three days later, these days, with the aid of computers it takes 12 days !!)

Careful_ly

My bill from Atlantic received in December were also estimated
Gas estimated units 91 actual 245
Electric estimated 718 actual 1565
Price rise 1.1.06 if they have done this on all the bills they will be making alot out of anyone who hasn't given an actual reading

espresso

I cannot understand all the moaning about estimated readings. Users would have had to of been on another planet to not know about the recent wave of price increases and do you really expect the energy suppliers to be able to read everybody's meter on 1st January!

All that is required, is that the customer provides their own accurate readings and then the customer stays in control. If users can't be bothered to do this, then an estimation of their use is the only sensible alternative!

:cool: