Advice needed....

PROLIANT

Hi Guy's, here is my situation;
My bill came in from E.On for my Dual Fuel online saver account, nearly choking on my coffee I read that they are increasing my Direct Debit from £62 per month to £93, I could understand if I used more then they will need to review my DD, however, my energy consumption is down by 30KW Hours (Combined fuel) per month compared to last year as you can see in the graph below:

The red line indicates 2008 consumption. Both Gas and Electricity are represented in the graph below;





I have spoken to E.On regarding this and they do not seem to care nor will they reduce my DD, I have been a loyal customer with Powergen/E.On for 4 years nearly and have never had an issue with them until now, I am not a "switcher" and believe that customer loyalty stands for something in this country - or maybe I am wrong?
If I can sort this out without moving supplier that would be my preferred course of action, any advice will be greatly appreciated and thank you in advance.

Regards

Proliant

Magentasue

Is this not a reflection of the price hikes - a 50% increase would be about right. Or are you on a long term fixed tariff?

If not, calculate your annual usage this year and feed into a price comparison site. I don't think customer loyalty will get you much worth having.

catenorfolk

it is easy to work out your usage if you have meter reads. also if a company will not bend over backwards to help, work out figures and explain things to their valued customers, they why would you remain loyal to them??? I would look around. Just get your meter reads from a year ago and current ones, and any company should jump at the chance of giving you help and advice whether or not you are with them. I can alway work it out for you

E.ON_Company_Representative

Hi Prolient,

An increase is usually the result of the Direct Debit amount being to low, and a debit balance accumulating on the account.

We are now in the time of year when the balance on your electricity and gas account should be close to zero (only a little debit or credit).

If this is not the case in your situation and there is a debit balance it will be because the Direct Debit was previously to low or not increased to reflect changes in usage or price.

This means the new Direct Debit figure will be made up of your monthly consumption (annual amount divided by 12) plus the debit balance spread over 4 months, so in effect the arrears will be cleared in 4 months and at the same time you maintain a monthly amount for your ongoing consumption, then after 4 months the Direct Debit will be reviewed again.

If you have paid £62 per month for the last 12 months then your total year’s usage (4 quarterly bills) should add to around £744. If your 4 quarterly bills are more than this you can see where the balance will have come from, also bear in mind price increases over the last year.

E.ON should explain this to you when you ask them, make sure you ask for the figures used to calculate the amount, and don’t end the conversation until you understand the calculation.

Hope this helps.

Brian

oldfella

We are now in the time of year when the balance on your electricity and gas account should be close to zero (only a little debit or credit).

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I thought that payments were averaged to pay the balance over the year, so whether you are DB or CR also depends on when your account year starts ?

Magentasue

oldfella wrote: »

We are now in the time of year when the balance on your electricity and gas account should be close to zero (only a little debit or credit).

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I thought that payments were averaged to pay the balance over the year, so whether you are DB or CR also depends on when your account year starts ?

This has always been the case for me. I have noticed, though, that over this winter a lot of people have had DDs increased so that they are at zero around April. The idea, I suppose, is that they are always in credit which works in the interests of the supplier but also deters people from building large debts in the winter.

E.ON_Company_Representative

Hi oldfella,

E.ON use a spring review system, meaning they want all Direct Debit customers to be in a position where there is little debit or credit on the account at this time.

This is because at this time of year DD customers should have had the last of their higher (winter) bills so the credit they built up in the summer would in theory now have been used. The coldest time is over so customers should now start to see a credit gradually build up between the spring and the autumn.

Then a credit in the autumn will be ready to be used for the higher bills later in the year.

For customers that join E.ON half way through the year the amount is calculated with the following spring review in mind, this means new customers on DD won't have to pay more just to ensure they have a zero balance in the first spring.

So when the first spring review is reached the following year can be projected with a view of having this zero balance.

Brian

oldfella

E.ON use a spring review system, meaning they want all Direct Debit customers to be in a position where there is little debit or credit on the account at this time.

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doesnt this have the effect of maximising cash flow for E.ON ? If all the account years start in the winter everyone will owe money for most of the year. If the account years start when there is low usage, then the company will owe money for most of the year

E.ON_Company_Representative

The aim is to stop large debit balances acruing and large, unnecessary credits building up.

So in effect the spring time is when the usage is likely to be at a mid point rather than when the usage is higher or lower.

This may not be the same for each and every customer, but there has to be a review date. The spring is the time when energy usage dips but isn't at it's lowest.

Brian

PROLIANT

Hi E.ON rep (Brian), thank you for your assistance with my queries.

As stated in my post I am using a lot less energy this year than I did last year therefore my DD should not increase - if anything it should reduce or in order to absorb the price increase in gas and cope with the price reduction in Electricity, the DD should only fluctuate a few pounds or so - not + 50%, this is wrong.

I am savvy as far as working out usage per Kilowatt Hour etc so even at a glance from the chart that I posted at the top of this page you can see that the sums do not add up, ok I have a £56 debit on my account and I have no issue clearing that in full but to bump my monthly fees up by 50% is not right. :cool:

oldfella

I would guess this would still mean that E.ON accumulate a substantial amount of cash by forcing every DD to go through the same averaging process where the weighting is more towards E.ON than the customer - doesnt sound like a good deal to me !