NPower

Mikex

I was interested to hear in the news this morning that NPower were to give refunds to customers who had been charged incorrectly. This reminded me of an issue my in laws had with NPower (still unresolved) a few years ago.

My wife dealt with the correspondence so I only have a general understanding of the problem as follows:

My inlaws had a contract with NPower for gas that stated something to the effect that they would receive say 1000 units of gas per annum at an increased price of say 20p. They would then be charged a lower price (say 10p) for the rest for that year.

Seems pretty straightforward to me, the more you use the more attractive the price.

However what actually happened is that they were charged the 1000 units at 20p then a few at the reduced rate of 10p. A few months into the year there was an increase in the price of gas. The new prices were 24p for the first 1000 then 12p for the rest.

My inlaws had already paid for their 1000 units at the expensive rate so I thought it would be reasonable for them to be charged 12p for the rest of the units used that year. This prooved not to be the case and they charged them for another 1000 units at the expensive rate now at 24p. So instead of paying the increased rate for 1000 units they actually paid the full price for 2000 units in that year.

We contacted NPower and they said that is the way they do things. Every time there is a price increase customers have to start all over again and pay for 1000 units at the expensive rate. They did not understand the point I was making about the contract saying we should only pay for 1000 units at the full price.

We then contacted the ombudsman or watchdog (can't actually remember who) and was told they are only interested in taking on our case if the claim is more than £400.

We did not resolve the case and moved supplier.

Just wondered if anyone has any information or being in the same situation.

Thanks

Mike

davidgmmafan

IMO what the Ombudsmen said is dead wrong, given the timescale it might be difficult to argue. For me it is clear, if it says no more than x amount per year then it means exactly that, you cn't change the definition of that just because it suits you (Npower).

notbritishgas

I think you have slightly misunderstood how the system works.
To take your figures, the 1000 kwh (units) at the higher rate are not paid upfront at the start of the year but are spread out on a daily basis, ie each day 1000/365 are costed at the higher rate.
So when the price increase took effect you would not have used up all of the 1000 units, the remainder would then be paid at the even higher rate.
Npower are/were different in how they allocate the higher units, (see the "gas sculpting thread") and allocate more of them per day in the winter months and less in the summer, but still maintain the yearly total of 4572 in npowers case.
There is however a sting in the tail and in 2007 they temporarily changed their system which meant that people did in fact have more than 4572 kwh charged at the higher rate. Your inlaws might have been affected by this, but more info is required before anyone can say.
As a final word, npower have finally said an error was made back then and are prepared to pay compensation to all those affected.

Mikex

Thank you notbritishgas,

Yes we have all misunderstood how the system works and when Npower had the opportunity to explain this they failed to take it resulting in my inlaws taking their business elsewhere.

Mike

notbritishgas

Mikex wrote: »

Thank you notbritishgas,

Yes we have all misunderstood how the system works and when Npower had the opportunity to explain this they failed to take it resulting in my inlaws taking their business elsewhere.

Mike

Yes when the 2007 episode came to light the call centre staff were either briefed to deliberately give misleading,unclear or false replies, or they themselves were so confused by what was going on that they made up their own replies.
I think they have lost customers, I left them this year on account of this and other underhand tactics.
The good news is that the compensation payments will apply to ex customers as well so if your inlaws were affected they should get a payment. No need to do anything, just heard on the midday news that a letter will be sent and customers take it to the Post Office who will give out the money!

Mikex

Thank you again notbritishgas,

I have just shown my wife this thread and she immediately said my recollection of the problem is way off the mark.

She has produced her letter to Npower of 25th March 2008 which I will precis below:

Dear Sirs,

I ave been looking through some old gas bills and am having a problem reconciling the figures.

I understand gas prices are charged at 2 rates.

For many years I have been charged for 4572 units at the higher price but recently have noticed I am being charged for more than 4572 units per annum at the higher rate.

For example

In 2004 charged for 4572 units

2005 charged for 4572 units

2006 charged for 4394 units

2007 charged for 5651 units

2008 charged for 2652 units (for first quarter)

Your letter of Nov 2007 indicated you will be seasonally weighting the higher priced units but I will be only charged for 4572 units in a 12 month period.

In particular to be charged for 2652 units for the first quarter of 2008 seems excessive.

I look forward to your full explanation.

Npower replied as follows: (preces)

Dear Sirs,

Thank you for contacting us to express your concern that you have been billed more than 4572 units over the past year at the higher price.

Firstly let me describe the background to Npowers current gas tarrif structure. Npower gas tarrifs for non prepayment customers are two tier ie 4572 kwh each year at higher rate remainder at lower follow on rate. two tier structure introduced in 2003.

The reason for weighting the application of the primary unit block is to increase the confidence we have in recovering fixed costs from all customers equally. if we dont do this those customers who use little or no gas in the summer do not make a fair contribution.

Unfortunately we had to temporarily suspend the seasonal weighting of the primary unit block for a period during 2007. This was done in order to help with the programme we have been undertaking during recent months to move all gas customers billing records to a single best in class billing system. (you may know npower was formed by combining a number of separate energy companies into one larger group, each of the individual companies had their own billing systems and in recent years we have undertaken the hugely complex task of transferring these complx customer billing records on to one dual fuel system). Changing to the simpler flat primary block profile methodology of migrating records from system to system slightly less complex.

Importantly when suspending seasonal block weighting i this way we recognised that in the following months a higher number of units would be charged at the primary block rate than would otherwise have been the case and so this was taken into account when setting lower gas charges in april 2007. The secondary unit rates we set in april are much lower than they would have been if the normal seasonally weighted application of primary block units had continued throughout. This change was done to offset the higher charges from the added primary units.

We always intended to revert to seasonally weighting gas primary block units. This method, although more complex means that a greater proportion of customers pay their fair share of the fixed costs involved in providing their gas supply.

Thank you for bringing this matter to our attention. I sincerely appologise for the confusion and any inconvenience these changes have caused but would like to reassure you that the need to move away from the seasonal weighting of primary units should not arise again.

I trust the rather lengthy explanation provides reassurance that you have not been incorrectly charged and I can assure you that we are looking closely at how our communication of this issue and any similar billing issues could be better done now and in the future to give greater transparency.

Kind regards

etc

Mikex

Please excuse one or two typos above.

I look forward to receiving more replies.

I now understand my inlaws will be due a refund?

Mike

undaunted

The thread on gas sculpting above is the one you will probably want to read through.

notbritishgas

Hi Mikex
Looks like your inlaws were affected by npower temporarily suspending their sculpting in 2007, they used 5651 which as you say is way over the 4572. They should be due some sort of compensation, wait for the postman.
As for paying too many in the first quarter of 2008, to give you an idea how the sculpting worked then:
In Nov,Dec, Jan , Feb they charged 882 per month at high rate
In march 272
In April, Oct 271 per month
In May, June, July,Aug,Sep 46 per month
Which add up to 4572.
So you can see it would be quite possible to use 2652 in one quarter.

Terrylw1

Hi Mikex,

There is no limit to the compensation, they are refunded every overcharge in 2007 due to this error.

They are now sending out payments via the PO, rather than refund via accounts.

If you have left them, you should get something. However, if you have moved, the letters may not get to you so they are advising people to call them.

They have worked out all customers needing a refund, but some they have no way to contact.

Good luck.

Mikex

Thanks for replies,

My wife was adamant she was right and Npower were wrong all along but due to the small amount of money in dispute we decided best plan was to kick Npower into touch & find a new supplier, which we did. However she will be delighted to receive a refund (however small).

Mike