Pay on estimate?

sambucus

My last gas bill from Npower was estimated as usual so I checked the reading and found usage was about 10% less so I sent off the new reading. The new bill, however, was only 5% less than the original. Maybe I`m naive but I expected it to be around 10% less.
I`m now wondering if it would have been worth paying the first bill and getting the extra gas for 5% more money against the next bill, or whenever they work out the years under/overpay.
I can`t work out how they price the gas, there seems to be about four different tarrifs al on one bill.
Any opinions?

Cardew

Welcome to the forum.

When gas prices were rising 2 or 3 times a year it was to your advantage if they over-estimated consumption as, effectively, you would be getting the more expensive gas at a lower price.

Now we have entered an era of prices dropping(hopefully) it works to your disadvantage.

You will normally have 2 prices for each kWh on a bill. The first units in a quarter you pay at a higher price(tier 1) and the rest at a lower price(tier 2)

However if your bill covers a period where there was a price rise(or price decrease in future) you will have Tier 1 and Tier 2 at the old price, and Tier 1 and Tier 2 at the new price.

sambucus

Thanks for that, Cardew

tripled

The reason is because there is a standing charge built in to your tariff. Either it will be listed as a seperate charge, or it will be built into the tier one unit rates. This is a fixed amount so would not be affected by the lower reading you gave, so you wouldn't see the full percentage drop.

A simplified example would be: you pay a standing charge of £20 and get an estimated bill for £20 of gas, a total of £40. You phone through the new reading to find you have only used £10 of gas, 50% less, but you would still get a bill for £30 (25% lower) as the standing charge stays the same.

(The only exception would be if you have your standing charge built into your unit rates and are an extremely low user, however it is mostly only vacant properties that are affected by this.)