Beware of npower billing calculations

gmang

I'm a bit annoyed with npower. Last October I switched to their Sign Online Dual Fuel tariff via uSwitch because it was the cheapest. I knew what my average annual usage was for gas and electricity when I switched (based on many years of previous bills) so I put in the kWh numbers and it came up with £42 per month for gas + electricity. Yay, or so I thought.

However, the uSwitch amount includes a £100 annual direct debit discount which is applied to the account every 12 months. Last week, I got my second statement from them (after 10 months). All looked as expected. I have two months before my £100 discount, it's summer so we're not using much energy and my balance is £110. So, in 2 months time this will be down to about £100 because my energy usage is low and the £100 discount will then clear it to zero. On the statement they also included my expected cost over the next 12 months based on current usage - they reckon I'll pay £502 (including the £100 discount), or £42 a month, so I was spot on with my estimate last year.

I filed the bill away feeling a little smug with my precise calculations. Then a few days later I got a letter from npower saying they are increasing my monthly payments from £42 to £71! How was this possible?? It took some time on the phone to them before I understood how they do their calculations.

Firstly, the £100 discount is not included in their calculations, so according to them I am £110 in arrears. Also, despite their own cost prediction including next year's £100 discount, their direct debit calculations do not include this. So, they want to bill me assuming I'll be using over £600 a year, and include a extra charge to "clear my outstanding debt". They wouldn't budge, even though we both agreed on how much energy I use now, and how much I'll use next year!

So, it seems the best thing to do it wait until I get my £100 discount for this year then switch suppliers again the next day. It's a lot of hassle but I refuse to pay them 75% more than I actually owe them each month.

I guess eventually it would all even out and I would pay the right amount, but this whole prepayment method seems to benefit the utility companies more than the consumer.

The warning I want to get across is that if uSwitch say that your costs will be less with npower, and you use exactly the same amount of energy as you predicted, then you will still be asked to pay extra because of the way npower do their calculations.

undaunted

If they billed you including the £100 "discount" as you wish then they would be gathering less interest on your money than if they collect the higher figure and then "refund" you in 12 months time. Npower are only interested in Npowers profits not listening to your concerns or "budging". Switching elsewhere is the only way to demonstrate that they can't just treat you / people as they like, whatever they seem to think!

Premier_2

One of the issues with agreeing to pay monthly by direct debit is that you are left in the hands of the supplier as to how much they collect. They will (hopefully) base that amount on ensuring you pay off the full amount in one year (excluding any anniversary discounts as you may not still be with them on the anniversary date), but more often suppliers have a set date when they expect the account to be zero.

You could try asking the supplier if they will accept a lower monthly payment now, but probably your best bet is to wait until you get the anniversary bonus, apply that to the account (if not already done so by the supplier) and that should result in a lower monthly payment

davidgmmafan

Actually I'd tell the supplier they set it at a certain amount or you will leave. Clealry some customers do this with wrong figures, and constantly change suppliers, however most of the time people are just trying to use a little common sense. As you as you understand setting x amount may not cover then I don't see the problem.

The issue here is to do with NPower (IMO !!!!!!) reassessment process. They do an annual review which I've never had a problem with, but for some reason they also do a six monthly reassessment. This looks at any balance and consumption to be paid over a six monthly payment, the reverse is true if you are in credit. This is why sometimes they do clever things like put your payment down to £2 on gas because you are in credit going into Winter.

Best to do the figures yourself and stick to it. At least if you are wrong then you know its your error. Ask them to do the calculation over 12 months it will come out lower. The discount is worth £100/month, as you say they take it into account when they forcast the cons, but not on the six monthly reassessment.

It is one of my bug bears to be honest, when they change the DD they say your new payment is instead of this is what we recommend. Its not set in stone but they want people to think it is.

HappyMJ

gmang wrote: »

I filed the bill away feeling a little smug with my precise calculations. Then a few days later I got a letter from npower saying they are increasing my monthly payments from £42 to £71! How was this possible?? It took some time on the phone to them before I understood how they do their calculations.

Firstly, the £100 discount is not included in their calculations, so according to them I am £110 in arrears.

First of all well done on your accurate estimation you deserve your smugness...lol...

What I can't figure out is why they want £71 when 100 divided by 12 is about 9 so I would expect they'd ask for (42+9)£51 then credit you £100 again in a year reducing it back to £42 for the year after?

ricky9

Recheck when you are due your £100 discount remember it is not due in 2 months time but 6 months time.
Credited to your first statement after 12 months.
Also watch out for the gas sculpting with npower you pay most of your 1st tier unit rate in the winter not the summer

dogshome

Hi gmang - The whole point of n'powers annual £100 credit is to produce a yearly overall cost that always puts them very near the top of of the Switch site tables, BUT, whilst it's included in the Switch tables, it is excluded by n'power when caclulating D/Debit levels.

The reason for this is quite simple - The £100 credit is in fact a sum of money in excess of the cost of the power you use, that is built up month by month, which you are lending to them.
It's reimbursement is dependant on having made 12 consecutive D/Debit payments, hence it will not show up on a bill issued just before the 12th D/D is due, and when you leave n'power the contributions you have made towards the next annual £100 credit are lost - They Win, You Lose.

gmang

Thanks for the responses!

HappyMJ wrote: »

What I can't figure out is why they want £71 when 100 divided by 12 is about 9 so I would expect they'd ask for (42+9)£51 then credit you £100 again in a year reducing it back to £42 for the year after?

You are right but you are forgetting my "arrears". My usage charge (according to them) is about £51 a month excluding the annual discount. However, as I have been paying £42 for 10 months my balance is £110. The extra £20 a month is to "clear my debt" with them over a period of 6 months, even though the £100 will clear it all in October!

ricky9 wrote: »

Recheck when you are due your £100 discount remember it is not due in 2 months time but 6 months time. Credited to your first statement after 12 months.

I don't know why, but I am out of sync with their 6-month, 12-month cycle. I joined in Oct 2009, got bill 1 in Feb 2010 (after 4 months) and bill 2 in Sept 2010 (after 10 months). This is part of the problem because right now my account is, according to them, in arrears! I have found out the exact date when the £100 hits my account so I will be on the phone to them again that week.

dogshome wrote: »

Hi gmang - The whole point of n'powers annual £100 credit is to produce a yearly overall cost that always puts them very near the top of of the Switch site tables, BUT, whilst it's included in the Switch tables, it is excluded by n'power when caclulating D/Debit levels.

Yes! This is exactly the point in question. It feel like a bit of a scam to me, but then the way they average out your gas usage so that you don't benefit from the two-tariff system is a bit of a scam too.

Also... the £100 credit is included in npower's own annual cost estimate on their own bills! It's quite contradictory when the bill itself says that they expect me to pay £502 for next year's energy but then set my DD at a rate where I actually pay them £100 more.