A Retrospective Price Rise?

alex21

Yesterday I received a letter from Power NI (previously NIE Energy) which said the following. ( I should point out that I use a key pad meter and am well in credit)

"I am writing to advise you that electricity prices will unfortunately rise by 18.6% on 1 October. We are very disappointed by this, but it is a result of high world fuel costs, which are outside our control blah blah....... then jumps to this

Your keypad will credit the amount of electricity bought and automatically change to the new rate on 1 October. Any credit on your keypad on 1 October will be charged at the new rate.

Am I being thick or does this mean that the electricity I already purchased at the old and cheaper rate is going to be at the new rate?

Is this not the same as if I bought groceries for £100 in August and the prices went up on 1 October and Mr T wrote and said anything you haven't eaten by Oct 1 will incurr an 18.6 surcharge the next time you go shopping.

I am so annoyed I am tempted to contact the Office of Fair Trading but does anyone think I am misinterpreting the letter?:mad:

cifpower

But you haven't bought any electricity as it hasn't been used yet

alex21

This is what I don't understand. If I have already paid for something at a set price how is that 'not bought'. If you bought potatoes from Mr T but you hadn't eaten them, you have still bought them surely? You have paid for them in advance of eating. You bought them. Why is electricity different?

cifpower

You only pay for gas and electricity at the time.of use as you don't store it like heating oil.or indeed potatoes.

chris1973

If I have already paid for something at a set price

But you haven't bought anything at a set price, you have simply loaded an amount of money into the meter ready to be used at whatever price is current at the exact second you actually consume it.

Anything you consume prior to Oct 1st will continue to be deducted at the current tariff, anything you use from Oct 1st will be deducted at a higher tariff from the balance which is on the meter

All the meter is, is a big electronic piggy bank, holding any money that you have loaded into it electronically as credit, in preperation for it to actually be consumed, at whatever the current rate is when you switch something on and actually use it.

You don't buy Electricity in advance, you actually buy it when you switch an appliance on

alex21

chris1973 wrote: »

But you haven't bought anything at a set price, you have simply loaded an amount of money into the meter ready to be used at whatever price is current at the exact second you actually consume it.

Anything you consume prior to Oct 1st will continue to be deducted at the current tariff, anything you use from Oct 1st will be deducted at a higher tariff from the balance which is on the meter

All the meter is, is a big electronic piggy bank, holding any money that you have loaded into it electronically as credit, in preperation for it to actually be consumed, at whatever the current rate is when you switch something on and actually use it.

You don't buy Electricity in advance, you actually buy it when you switch an appliance on

So buying gas is different then? I have bought gas on my prepayment card and it is converted to cubic meters when I put the card onto my meter. So for the last 2 years I bought all my gas in advance of the price rises in the winter and the cubic meterage was not reduced even though the price had gone up. Ie I didn't buy any gas all winter at the higher rate. My neighbour has an older gas meter which just shows the money. Are you telling me we are being charged differently?:rotfl:

chris1973

So buying gas is different then?

Not sure why you quoted me in asking that question, as i'm the wrong person to ask. I live in an all Electric property.

I didn't buy any gas all winter at the higher rate. My neighbour has an older gas meter which just shows the money. Are you telling me we are being charged differently?

Purely from reading your description, yes it appears that way. You'd need to ask both energy providers for the accurate answer though.

SwanJon

alex21 wrote: »

So buying gas is different then?

Maybe on your model meter, but not on most of the ones outside of NI at least.

alex21 wrote: »

I have bought gas on my prepayment card and it is converted to cubic meters when I put the card onto my meter. So for the last 2 years I bought all my gas in advance of the price rises in the winter and the cubic meterage was not reduced even though the price had gone up. Ie I didn't buy any gas all winter at the higher rate. My neighbour has an older gas meter which just shows the money. Are you telling me we are being charged differently?:rotfl:

I'm not sure how your supplier does it, but commonly the meter is merely a payment device. If it doesn't know about the price change it carries on releasing the gas at the old price. When you next top up, or the meter is read the company will see that you have underpaid and would be within their rights to charge you for it (although for most people it'd be more trouble than it's worth). If you didn't top up all winter the difference might be enough for them to notice.

eurmalian

alex21 wrote: »

So buying gas is different then? I have bought gas on my prepayment card and it is converted to cubic meters when I put the card onto my meter.

Every gas meter I have ever seen stores your top ups as credit on the front screen. It then measures your usage in cubic meters or hundreds of cubic feet, but I've never seen one that converts top ups into those instantly (that's not to say they don't exist, just that if they do they're rather rare).

eurmalian

alex21 wrote: »

Am I being thick or does this mean that the electricity I already purchased at the old and cheaper rate is going to be at the new rate?

Think of your key like a gift voucher if you want to do the supermarket analogy. If I buy a Tesco gift voucher today and then, by the time I try to cash it a month later, prices of various products have gone up. I can't then claim that I should get them all at the prices they were when I bought the voucher and if I tried it, the Tesco staff would laugh me out the door. All I bought at that point was the credit. The prices I pay for my food are whatever the prices are at the point I cash that credit. Prepayment meters work the same way.

Plushchris

eurmalian wrote: »

Think of your key like a gift voucher if you want to do the supermarket analogy. If I buy a Tesco gift voucher today and then, by the time I try to cash it a month later, prices of various products have gone up. I can't then claim that I should get them all at the prices they were when I bought the voucher and if I tried it, the Tesco staff would laugh me out the door. All I bought at that point was the credit. The prices I pay for my food are whatever the prices are at the point I cash that credit. Prepayment meters work the same way.

Good explaination.