prepayment rules are wrong

Cardew

Judi wrote: »

Whats a credit meter? ive heard of prepayment meters but not a credit meter.

A credit meter is the 'normal' gas and electricity meter. So called because we have our electricty without paying for it straight away i.e. we have it 'on credit'.

System

oh, i see . Thanks.

undaunted

Cardew wrote: »

I do wish you would have some balance in your posts.

If you care to search MSE or the web about 3 years ago you will find the links to a long document of the minutes (and video) of the evidence given by the bosses of the Big 6 to the Parliamentary Committee on Energy on this issue - amongst many others.

At that time pre-pay(PP) tariffs were considerably more than Standard Tariffs and the Big 6 were questioned at length about justification for that price differential. All stated that even those higher prices did not cover the increased costs of administering PP tariffs.

Some while later there was a debate in Parliament about this issue and it was argued(with justification) that the higher PP prices impacted disproportionately on the poorer members of society.

The Chancellor announced that he had written to the energy companies 'threatening'(my definition) that unless they reduced prices - as well as setting aside money for social tariffs - legislation would follow.

Look it up in Hansard.

The companies obliged! So the position is that both PP tariffs and 'social tariffs' are subsidised by other customers - it really is a simple case of 'Robbing Peter to pay Paul'.

Your implication that PP customers are exploited by 'seriously unscrupulous energy companies' is incorrect.

I've seen the document you refer to before but unlike you I simply don't believe it to be true just because some energy company bosses said so. They, like politicians for that matter have been known both to lie and manipulate facts & figures on occasions!

You are entitled to your opinion I too mine. Energy companies were getting their money up front and charging poorer customers (many of whom will have had no choice in whether the PPM was fitted) well over the odds for it previously. I'd call that unscrupulous!

undaunted

mattcanary wrote: »

Ah yes Cardew, but you have ignored the fact that when this debate was going on, cardmeters were still being used for electric. These were quite costly to administer because a representative of the supplier had to physically go around to all properties with prepayment meters to reset the prices when they were changed. If this was not done, the customer would still be charged at the old (wrong) prices (and this did often happen).

Nowadays all customers have keymeters. These get automatically reset to the new prices if they change, when the customer goes to the top-up outlet to get credit put onto the key.
This must reduces a substantial amount of the costs to the supplier.

In addition, as has already been said the supplier is guaranteed to get their money upfront with a prepayment meter (unless the customer has tampered with their meter). Why else would suppliers be so keen to get a prepayment meter installed into a property if the customer goes into debt?

And why are many suppliers so reluctant to remove prepayment meters once they have been installed (even if the customer moved in after the prepayment meter had been fitted). Surely if they cost so much to maintain, the supplier would be keen to get the prepayment meter taken out??!!

A customer can easily set up a Direct Debit scheme on their account, only to cancel it before the payment is due to go out of their bank account (or not have enough money in their bank account to cover the monthly payment). In addition, many Direct Debit customers are very blase about things. They won;t check their account to make sure their payments are set at the correct amount. Many don;t send in readings for months/years at a time when they are estimated leading to the account ending up massively in debt / credit. A lot of people do really think that once a monthly amount has agreed that will always be correct, regardless of how much they use.

You won;t get any prepayment meter customers and few customers that pay their bill by payment card / quarterly bill think along these lines!


Direct Debits are not the holy grail - either for the customer or the supplier. It is daft that you get such a big discount for paying by Direct Debit.

Mind you, there is one advantage for the supplier - they can set the monthly Direct Debit instalments up for an amount that is higher than what they think the customer will actually use - resulting in a nice credit building up on the customer's account. Of course, this means that the customer isn;t necessarily paying less for their electric / gas by Direct Debit, compared to other methods in the short term. Additionally, the utility company can earn interest on the credits that develop on such accounts before they refund the customer (or never refund the customer -just alter future monthly payments accordingly). A nice littlew earner for utility comanies, I'd say!!

Not quite as balanced as he / she thinks themselves to be then?

Cardew

undaunted wrote: »

Not quite as balanced as he / she thinks themselves to be then?

I simply cannot believe you have the gall to talk about balance!

homebased

I have just moved from n power to EBIco .If you have a pre payment meter or not its the same for every one.
Its a not for profit energy supplier with a simple flat rate for all.
No daily charge.I did a cost run NPower v EBIco on the energy I use over the year.Check it out for yourself on the price per Kwh.

chris1973

Don't forget that not everybody is on Pre-Pay meters by choice or as a result of a previous debt!. Many thousands of tenants in rented properties are on them and unable to change to a credit meter as it forms part of their tenancy agreements, especially with large numbers of landlords already having had bad experiences with previous tenants, skipping town leaving massive debts.

No daily charge.I did a cost run NPower v EBIco on the energy I use over the year.Check it out for yourself on the price per Kwh.

Thanks, I have done just that, and i'd be worse off.

I pay £56 a year standing charge on an Npower E7 tariff, which is roughly £1.07 per week. The difference in the Economy 7 off peak Electricity cost with Ebico, compared to Npower is nearly 1.6p per KW/H more for the overnight electricity, when bought from Ebico.

I use storage heaters, which, in combined usage during the colder months will often guzzle upto 50 units per night of Electricity. On Ebico, their 1.5p per KW/H extra cost, will mean I pay an extra £0.75p more per night for those 50 units, in actual electricity costs over Npower.

75p per night, over 7 nights would cost me an extra £5.25 per week, a hell of a lot more than sticking with Npower and paying the weekly standing charge of £1.07

If I took your advice, and moved to Ebico, sure I would have the 'feel good' factor of not having a standing charge, but I would effectively be paying an extra £4.18 per week in relation to the higher cost for E7 electricity. Thats one hell of an expensive feel good factor!.

Like most business, what may be construed as a saving in one aspect will probably be clawed back with higher prices elsewhere.

Some comparison sites do not include standing charges in their comparisons, and only compare the actual energy costs. There is no substitute sometimes, for reading the small print, and digging out your old school calculator.

[Deleted User]

overall there is a greater cost to run prepayment meters throughout the industry they are subjected to huge ammounts of tampering and bypassing compared to credit meters. the electric key prepay is the most common tamper, as a meter reader i have located at least 6 in one street alone last month.I have been told by revenue collection staff that some people deliberately get a forced prepay installed simply to bypass it and get less hassle then a credit meter.Roll on smart meters which promise to end the free energy bonanza currently in progress,and our jobs,oops