MSE News: Npower to pay £70m in refunds after billing blunder

scoobysave

Looking on their website T&Cs it states

Our charges
You agree to pay our charges based on the tariff which applies. You can find details of our charges and how we work out our charges in any 12-month period on your bill, in our tariff literature, on npower.com/web/At_home/electricity_and_gas/prices_and_discounts/index.htm or by calling customer service.

From searching through their FAQs I have found a page describing how they work out their charges (sorry it won't allow me to post links to the page but it's in the FAQs on page 4 titled "How do you apply your prices?")

Basically for gas they say ..

Primary rate gas is charged across the 12 months on a seasonally adjusted basis, with more primary rate units being charged in the winter months as follows:

Months - Maximum units charges at primary rate Per month
Nov, Dec, Jan, Feb 882
March 272
April, Oct 271
May, June, July, Aug, Sept 46
Annual total 4572

For a detailed example of how we charge for gas, see how to work out your gas bill.

Why do we charge in this way?
There’s no standing charge on most of our credit tariffs so the primary rate covers the fixed costs we have to pay in supplying gas to you, e.g. distribution and metering costs.
For gas we charge more units at the primary rate during the winter months to reflect the fact that most customers use more gas in the winter, and to ensure that all our customers pay a fair share to cover our fixed costs.

To be able to accurately calculate the refund we would need a month by month useage then it should be simple enough to calculate, I wonder if I call them again they will give me a month by month breakdown?


This does assume that the refund calculation is based on the same charging method as the original bill which would be the fairest and obvious method! If I can get the monthly breakdown we can find out.

sofa-spud

scoobysave wrote: »

This does assume that the refund calculation is based on the same charging method as the original bill which would be the fairest and obvious method! If I can get the monthly breakdown we can find out.

At least part of the problem is the stated figures where only applied from 1/11/07. Prior to this it was flat rate of 381/month from May to Oct 07.
These two changes are what initially caused the ovecharging. Prior to May07 there was yet another weighting profile in force since 1/10/04(are you keeping up:)).
Its relatively simple to work out how many units you've been overcharged forco, the issue is trying to fathom is how they have apportioned these across the relevant year. If you can get them to break the figures down into a monthly allocation for the overcharge it would answer many peoples questions...
So far it appears they have been reluctant to do this.

scoobysave

sofa-spud wrote: »

(are you keeping up:)).

I am trying!

sofa-spud wrote: »

If you can get them to break the figures down into a monthly allocation for the overcharge it would answer many peoples questions...

I will give them another call today to ask.

At best they may only be able to give me quarterly breakdowns (from meter readings given) but using the weighting above on those quarterly figures may give a clue as to how it has been allocated (or how you would imagine they have done it anyway! :wall:).

DirectDebacle

scoobysave wrote: »

Thank you all for the replies.

I called nPower again this morning to get more info, I was on the Sign Online 4 Tariff and was charged at the following rates:

From April 2006 High (H) 3.165 Low (L) 1.691
From 1st July 2006 (H) 3.639 (L) 2.047
From 1st October 2006 High (H) 4.265 Low (L) 2.399
From 30th April 2007 (H) 4.412 (L) 1.915
From 5th January 2008 (H) 5.096 (L) 2.212
From 29th August 2008 (H) 7.465 (L) 2.577

Can't be sure without seeing your bills but a very good chance you were overcharged for the year April 2006 - April 2007.

Many customers were moved from a flat profile to a weighted one on 1/10/2006. You need to check.

DirectDebacle

scoobysave wrote: »

I checked on MSE for any advice to see whether by accepting this offer now I have accepted this in full and final settlement of any possible claim, this was how I found this thread.

If it was more widely publicised then I (and many other like me) would have claimed earlier as some people have done. I can however see that it must be hard to try to ensure a reasonable coverage of most topics without making the email so long that it never all gets read, but this does affect a large number of people so could/should have received more publicity.

Does the letter say it is in full and final settlement?

I don't see it matters if it does, if the settlement figure itself is mis-calculated.

bettyboo1923

Can anybody help with my query please.

I contacted npower who told me that my anniversary runs from 15.10.06 - 16.10.07. During this time they calculate they overcharged me 996 units which equates to £24.87. However they are only refunding £9.64 as I was 'undercharged' on the high units during the following year 15.10.07 - 14.10.08.

I'm waiting for them to send me a breakdown. I still can't work out during which period of dates they are supposed to be using as I was assuming it was 2007-2008 but in my case they are using 2006 - 2007. The girl at npower said everybody had different dates which I assume is how the anniversary date comes into the equation.

Can anybody shed any light please.

thank you

scoobysave

DirectDebacle wrote: »

Can't be sure without seeing your bills but a very good chance you were overcharged for the year April 2006 - April 2007.

Many customers were moved from a flat profile to a weighted one on 1/10/2006. You need to check.

I have just called them to request a breakdown of either their refund calculations or my units charged.

They cannot supply this info (what a surprise!!) but are going to send me copies of all of the bills for that period, so I will post the info as soon as received.

DirectDebacle wrote: »

Does the letter say it is in full and final settlement?

I don't see it matters if it does, if the settlement figure itself is mis-calculated.

It does not state that as far as I can see on the letter, but you know what these companies are like.

During the last phone call I was told the Post Office refund will now automatically be sent to me, I said that I do not want it yet until I have done some calculations and she (being the operator on 08009757938) said until it is cashed I am free to query the figures, now this may just be her understanding of the situation (rather than the official line) but would indicate that once cashed they may be even less likely to help.

DirectDebacle

sofa-spud wrote: »

Thanks for these, I've plugged these into a spreadsheet & based on your prices they seem to have assessed that you used approx 1220 units for Apr 07 to Dec 07, the remaining 720 they assess was used Jan 08 to March 08. Clever, but its still in their favour the way they have done this.

Not least the 'payment in lieu of interest' which has denied you of £7.75 in my opinion.:cool:

From the info you have supplied so far it is obvious that npower are basing the refund on values calculated throughout the year of concern.
i.e. it appears they have decided that they overcharged you for 183 units in May 07 at a cost of £4.58 +VAT. If these were refunded on the Jan 08 prices it would have been £5.28+VAT

Clearly they have done it this way instead of the method that you would have reached 4572 sometime in Jan(probably) and so all units over 4572 where charged at the rate in force for these month(s), in your case it would have been for a total of £56.01 +VAT & interest.

From their point of view it would seem logical to use the original weighted profile as if the changes had never taken place and then calculate the monthly overcharge caused by the changes in May and November.

Problem here is when you compare March 08 onwards to the original profile there are less units charged. So are these units being deducted as if they were an undercharge?

Now if they are admitting that customers were overcharged on a monthly basis and not an annual basis would it not be fair to re-imburse a customer who was with npower for example April 07 to Nov. 07. Surely they were overcharged from May to when they left npower?

Would npower argue that as the customer was not charged more than 4572 they did not qualify for a refund. If they argued that then they are saying that overcharging was not on a monthly basis but at the point the 4572 maximum was reached.

So what about the customers who were charged more than 4572 but were with npower for less than a year. Are npower looking at these accounts or are they being filtered out because they are under 12 months?

Clearly under the T & C's npower cannot charge more than 4572 in a year. It is a matter for them how they apply these units. If they accelerate the rate so that all 4572 are charged in any period less than a year then they are not entitled to charge any units at the P.B. rate for the remainder of the year. If they do then these units are charged at the applicable price at the time they occur.

I expect these points will be answered by npower in their usual clear as mud manner, eventually.

DirectDebacle

bettyboo1923 wrote: »

Can anybody help with my query please.

I contacted npower who told me that my anniversary runs from 15.10.06 - 16.10.07. During this time they calculate they overcharged me 996 units which equates to £24.87. However they are only refunding £9.64 as I was 'undercharged' on the high units during the following year 15.10.07 - 14.10.08.

I'm waiting for them to send me a breakdown. I still can't work out during which period of dates they are supposed to be using as I was assuming it was 2007-2008 but in my case they are using 2006 - 2007. The girl at npower said everybody had different dates which I assume is how the anniversary date comes into the equation.

Can anybody shed any light please.

thank you

I would challenge any claimed 'undercharge'. The 4572 per annum is a maximum amount not a mandatory amount. You are not interested in years that you were not charged more than 4572, only the years that you were.

If npower have introduced a charging system that means you pay less than 4572 in a particular year then that is their problem.

In any event if you used sufficient gas there would have been a small overcharge for the year 15/10/07 - 14/10/08. If your usage for that year was insufficient for you to reach 4572 units then there is no 'undercharge'.

They have to apply this 4572 block of units over a year. If a customer does not use that much then the difference is not carried forward to the next annual block of 4572. Neither can units in excess of 4572 be carried forward to the following year or if less than 4572 are used the 'spare' units deducted from the previous years overcharge.

npower are plunging to new depths if they are claiming that customers who use less than 4572 in a year are having these units deducted from a year when they were overcharged.

With the excellent work Sofa Spud has done I thought we were beginning to get an idea of how npower are administering these payments.

I have seen a post on another thread where a customer said he was told by npower that they were 'undercharged' in a year and units had been deducted. Seems npowers fog is now turning into another of their 'pea-soupers'.

DirectDebacle

From this thread:

https://forums.moneysavingexpert.com/discussion/2784452

I received a letter with a repayment of only £14.06.
After speaking on phone with them for over an hour including speaking to a manager, I was given the following information.
My account billing date is September. Calculation is from 6 September 2006 to 5 September 2009 ie 3 years.
They said that although I was over billed by 1790 units for the year May 07 to May 08 (a year for which I had a complete bill), I was undercharged in the following year. Just kept talking about how many winter quarters are included. They seem to have lost a letter of complaint that I sent at the time.
The difficulty in any calculations is that although they say the billing date is September, that month doesn't actually appear on most bills and most are only estimated anyway. They are supposed to be posting me the bills for the 3 years but I suspect it will still not be possible to determine the overcharge even by their rules.