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

edited 1 October 2010 at 1:48AM in Energy
174 replies 21.4K views


  • edited 2 November 2010 at 12:23PM
    metoyoubearmetoyoubear Forumite
    1.4K Posts
    edited 2 November 2010 at 12:23PM
    Not easy to answer so I will try to explain.

    The money you have received is for an overpayment you made back in 2007/8. At that time you were almost certainly charged for the correct amount of gas you used (units or kWh, same thing) but some of those units were charged at the incorrect price.

    You are probably aware that your gas is charged at two prices. The higher price is for the first 4572kWh per year. Gas used over this amount is charged at the lower price.

    Usually this 4572, known as the Primary Block, is spread evenly over the year. That would be 381kWh per month. So in the summer you use little gas say 200kWh in a month then all of these will be charged at the higher price. In the winter say you used 581kWh in a month then 381kWh would be charged at the higher price and the remaining 200kWh are charged at the lower price. Very few people are billed monthly so a quarterly bill usually will show a larger number of units at each price than in my example.

    In May and November, 2007 npower changed the way they allocated the amount of Primary Block units to each month. This meant that over a 12 month period many (1.8m) customers were charged for more higher priced units than they should have been. After a long battle npower are finally refunding the overpayments.

    Despite campaigning by The Times and a huge npower 'gas sculpting thread' on this forum it appears many customers were unaware of what happened and are finding this payment a surprise, as in your case.

    Back to your question, 'how was it calculated'. The answer at the moment is we are not absolutely sure as npower have given no information for customers to be able to check.

    What they have said is that they are calculating payments using a customers anniversary date (the date you joined them) and using 12 months from that date calculating if more than 4572 were charged at the higher rate. If so the refund is the amount of units overcharged * the difference between your 2 prices plus VAT plus interest.

    I could do a close calculation of what you were due if I knew your start date with npower and a close estimate or better still billing details of your annual consumption of gas.

    Everyones payment will be different. It depends on your start date, how long you were with npower and for what period of time and what the prevailing price differentials were. In short it is almost as convoluted as the method they used to cause it in the first place.

    However it is important to be able to check because for some customers it could mean a big difference between what they are receiving and what they should be receiving.

    Thank you,i've kept all my bills,my first Gas bill from Npower is dated December 04 and it shows it started November 04

    I'm not sure about the annual consumption of gas though ?
  • How do you know if you were overcharged? Will they just refund you automatically if you were? Or do you need to contact npower?
  • Thank you,i've kept all my bills,my first Gas bill from Npower is dated December 04 and it shows it started November 04

    I'm not sure about the annual consumption of gas though ?

    Good. So if we take the start date as 4th Nov. Then we need bills to cover the period 4/11/06 - 3/11/07. Unlikely your bills will precisley start and end on these dates so use the closest. e.g. 1st bill starts 1/10/06 - 7/1/07. Then all the intervening bills and the last one which may finish e.g. 21/8/07 - 22/11/07.

    Simply add up all of the higher priced units charged on each bill.

    We also need the dates of the first and last bill you have used and your prices for the high and low units. There was a price change for most customers on 1/5/07.

    While you have your bills out it will be useful for you to know your average annual consumption in kWh. Entering this into a comparison site will give you the most accurate prices back based on your actual usage.

    Total all the kWh (high rate units + low rate) since you joined npower and divide this by the number of years they cover (6) to give you your average annual gas consumption.

    You should do the same procedure for electricity as well. Tedious but worthwhile having this information. It is what should be used to work out monthly DD payments.
  • meggsymeggsy Forumite
    741 Posts
    How do you know if you were overcharged? Will they just refund you automatically if you were? Or do you need to contact npower?

    You can begin 'your journey' here kittykitty ;)
  • edited 7 November 2010 at 6:28PM
    meggsymeggsy Forumite
    741 Posts
    edited 7 November 2010 at 6:28PM
    Customers past and present are also posting the amount of their refunds on

    this very fast moving board, I've bumped it back to the first page a few times :eek:
  • Thanks meggsy. Surprised the mods haven't picked this up and joined the threads.
  • sweetcarersweetcarer Forumite
    1.1K Posts
    Part of the Furniture 1,000 Posts Photogenic
    I got a letter - they say they are going to give me the massive sum of


    Wonder what I will spend it on?

    sweetcarer ;)
    :j cross stitch forever, housework whenever :j
  • do you really believe after all the lies from n power that they are going to pay us back with open arms all that they stole from us...............

    i have also recieved a refund for £44 , after doing an alloborate spread sheet wasting my own time and in theory money i have calculated this in the fairest manner (i could have calculated it more) to be actually £ addition to this i spotted rounding up to the nearest penny,conversion of kwh from cu incorrect and no dual fuel discounts (£90 ) from 12 months ago.

    WAKE UP SMELL THE COFFEE no explanation from n power on how they calculated the payback because they are yet again trying to pull the wool and rip us off.

    i also assume they could then use the argument that you accepted the refund end of matter.

    from my observations on how obstructive npower have been i can only descibe this multi million pound company as being run by cowboys

    well watch out npower the indians are on your case yet again.
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