EDF want to increase our DD payment by 50% - advice?

retepetsir

Hi all.

We moved into a flat last October and have gone with EDF for both gas and electricity. The heating system is brand new which makes it quite efficient.

Our DD was initially set up as £30 for gas and £30 for electricity.

Electric has been fine as we're still in credit. Due to the cold winter our bill for Jan to March was higher (obviously). However we've just received our last bill for April to mid-July and it worked out as £21 (inc DD discount and dual fuel discount) for 2.5 months of usage (less than £10 a month).

EDF have included a letter to say that after a bi-annual review they'll be increasing our DD gas payments to £45 per month, a 50% increase, from August 2nd and that we 'don't need to do anything'.

We're currently in £50 of debit with EDF, but on basic maths this would smooth itself out over the coming months.

Am I just able to phone them and ask them to keep it at £30? I've heard mixed stories about how easy it is. Yes we may be in debit, but the July to October usage should be similar to what we are using now and therefore get rid of this deficit ready for next winter.

What do you think? There's only 2 of us living in the flat.

Thanks

notbritishgas

I think you will find that the idea is not to get rid of the debit in the summer and start the winter on zero but to actually build up a credit during the summer to see you over the winter and get a zero balance next spring. (this obviously benefits the power companies)
Unless you are very frugal with your heating I would say £30 per month gas was a bit on the low side.

retepetsir

Fair enough, I've heard of that before.

Our average usage over the winter months was £45 per month, which led to the £50 debit. Our average use is now around £10 per month (hot water only).

With payments of £90 between now and October and a predicted bill of £25 for those months we'd be back to being slightly in credit (£15).

EDF have stated themselves that they would take a lump sum of £150 if we went that much in debit, or give back £150 if we're that much in credit. I'm happy with that, but the way I've worked it out is that we're never in more than £50 of credit or £50 of debit at any one time.

Is that unreasonable? If so then I'll leave them to change it to £45/month...

notbritishgas

What you could do is wait until Oct when you will have a years usage figure (make sure the Oct reading is an actual) then work out your annual cost and divide by 12. You may have to pay a bit more initially to build up the summer credit and to get your "zero" point where EDf wants it, ie about April.
If you accept the £45 then you say that will build up some credit anyway, which in my opinion is always better than being in debt. They can always reduce it to the figure you have worked out from the annual usage.

vfm

We're in a similar position, only with Eon. We are refusing to increase our DD by the amount they are requesting. I have telephoned them and told them we wish the DD to remain as it is and if they change it then we will look into changing supplier. After a lot of heated discussion they have agreed to keep the DD as it is.
I felt it was unfair for them to increase our DD when we are only in debit by a small amount and that by the end of the next quarter we will be in credit (based on passed usage).
I can accept a company taking your previous 12 month usage, dividing this by 12 and using this to base future DD on, however I don't understand why they want to base the DD on an amount far higher than this. In our case it was £250 more.
If I was you and you are sure you will be in credit and can afford to pay any balance immediately if you are not, then I would telephone and request that your DD remains as it is. Having said that I think your monthly payments are very low.

KimYeovil

vfm wrote: »

I felt it was unfair for them to increase our DD when we are only in debit by a small amount and that by the end of the next quarter we will be in credit (based on passed usage).

No, that is not unfair. You may have an argument about the size of the increase but an increase is due. And if you will only be in credit by the end of next quarter then you are completely wrong - you should be in credit after the first payment by this time of year.

sexandthecity

Not sure if EDF and Atlantic Energy are linked but there is a promotion on there at the moment for if you have been with them for 12 months by DD they give you a rebate, I just got £38 quid off each of my bills so worth a shot

Kane99uk

Can the OP afford to pay off the £50 debt on the gas account now? If so, phone EDF and see if they'll leave the DD as it stands if you pay up over the phone there and then.

Former_E.ON_Company_Representative:_Malc

vfm wrote: »

We're in a similar position, only with Eon. We are refusing to increase our DD by the amount they are requesting. I have telephoned them and told them we wish the DD to remain as it is and if they change it then we will look into changing supplier. After a lot of heated discussion they have agreed to keep the DD as it is.
I felt it was unfair for them to increase our DD when we are only in debit by a small amount and that by the end of the next quarter we will be in credit (based on passed usage).
I can accept a company taking your previous 12 month usage, dividing this by 12 and using this to base future DD on, however I don't understand why they want to base the DD on an amount far higher than this. In our case it was £250 more.
If I was you and you are sure you will be in credit and can afford to pay any balance immediately if you are not, then I would telephone and request that your DD remains as it is. Having said that I think your monthly payments are very low.

Hi vfm

I can see why you queried your Direct Debit increase. The proposed increase is a lot of money. :eek:

Direct Debits are based on usage but also include payments towards any outstanding balance that may be on the account.

Has your account been billed up to date using actual and not estimated meter readings? If it has then you will have used the electricity and the monthly payments will be based on this plus the debt.

Kim is right; I would also expect your account to be in credit at this time of year ready for the higher winter bills.

I would have another look at this if I were you. If your account is billed accurately and there is already a debt then you should definitely be looking at increasing your monthly payments as they were not previously covering your usage.

With similar usage and the same payments your account will probably slip further into debt over the next 12 months. However, the amount we asked for does seem a lot so I would call again and ask for an explanation of how it was calculated. Ask for it in writing as it can be printed off the computer.

I posted a rough guide to our Direct Debit policy on the forum yesterday. Don't know if it helps but it was on the following link - post number 59.

http://forums.moneysavingexpert.com/showthread.html?t=1799305&page=3

Hope this is of interest.

Malc

vfm

Kim - Everyone is entitled to thier opinion and just because my opinion differs from yours does not mean that I am wrong. If you think that it is fair to pay £250 p.a. more in utilitity bills this year than what you used last year (payments plus debit outstanding) that is fine, I don't. Each persons circumstances differ and one size does not always fit all. We like a lot of retired people take all our holidays in the winter to reduce utility bills.

Mark thankyou for your reply. When calculating the amount used I have included the debit outstanding. The person I spoke to at Eon agreed with me, but said the system said otherwise. Having said this they agreed to leave the dd as is.
If my debit balance at any stage was in excess of one dd payment then I would make an immeditate payment to clear my account, which I think is fair.

vfm

Mark - I forgot to say that if I have problems again, I will take your advice and I will ask for the formula which is being used to calculate our payments.
Thanks