Southern Power Direct Debit Discount

Islasamdad

As a Southern Power customer, and following their recent announcement of a 9% price increase, I started shopping around for cheaper deals.

Before signing up with anyone else though, I decided to talk to Southern and understand exactly what my charges would be following the increases.

It turns out that, as well as increasing their standard rates, they are also scrapping some tariffs - including my 'no standing charge tariff'.

Not only are they scapping the no standing charge, they are also changing the way their 6% direct debit discount works. Previously (as I had no standing charge) the discount was applied to my whole bill, now (as I will soon be forced to have a standing charge) the discount will only be applied only to the standing charge element of the bill - for me that means it'll only be applied to about 20% of the total annual bill.

I estimate this to make my headline 6% discount worth around 1% off my bill.

9% standard rate increase + 5% loss of dd discount = 14% increase in one year.

This loss of discount is worth taking into consideration if you are thinking of switching, as (from my calculations) moneysupermarket.com comparisions aren't including this in the potential savings figures.

I'm off to EDF thanks Southern!

Wywth

Islasamdad wrote: »

As a Southern Power customer, and following their recent announcement of a 9% price increase, I started shopping around for cheaper deals.

Before signing up with anyone else though, I decided to talk to Southern and understand exactly what my charges would be following the increases.

It turns out that, as well as increasing their standard rates, they are also scrapping some tariffs - including my 'no standing charge tariff'.

Not only are they scapping the no standing charge, they are also changing the way their 6% direct debit discount works. Previously (as I had no standing charge) the discount was applied to my whole bill, now (as I will soon be forced to have a standing charge) the discount will only be applied only to the standing charge element of the bill - for me that means it'll only be applied to about 20% of the total annual bill.

I estimate this to make my headline 6% discount worth around 1% off my bill.

9% standard rate increase + 5% loss of dd discount = 14% increase in one year.

This loss of discount is worth taking into consideration if you are thinking of switching, as (from my calculations) moneysupermarket.com comparisions aren't including this in the potential savings figures.

I'm off to EDF thanks Southern!

SSE, like other suppliers such as British Gas, are complying with Ofgems directions.

Ofgem, concerned by the number of consumers confused by the vast, complicated range of tariffs and the computation thereof, asked the major suppliers to offer a simple, no frills unit pricing in combination with a standing charge.
Two tier unit pricing (and other more complicated computational tariffs) were considered far too complicated for many consumers to understand.

The suppliers standard tariff is usually the most expensive anyway, not that the dumwits who can't use one of the many comparison sites will ever understand.

Lowest common denominator effect, I'm afraid.

Suppliers can offer other tariffs, as SSE do

jalexa

Islasamdad wrote: »

.
This loss of discount is worth taking into consideration if you are thinking of switching, as (from my calculations) moneysupermarket.com comparisions aren't including this in the potential savings figures.

That may be because the comparison websites have understood the Southern Electric discount, unlike the OP.

The Southern Electric website says this...

*£40 discount is given for paying by monthly Direct Debit and £6 discount is given for going paperless, discounts are per fuel.
†A discount will be applied to the daily standing charge on your bill if you choose to pay by monthly Direct Debit and/ or choose paperless billing.

[the website copy is poorly drafted, I cannot see what "[COLOR="Red"]†[/COLOR]" refers to]

I think that is a fixed discount of £46 per fuel, in billing terms deducted from the standing charge costs.

A fixed discount rewards low users the most, IMO something to be encouraged, but in all cases for accurate annual consumption a comparison website will correctly calculate the annual headline cost, including the effect of the discount structure.