OFGEM Billing Changes - Unintended Consequences

Legacy_user

This forum is littered with posters who have been surprised to receive an unexpectedly large bill from their energy supplier. It is fair to say that, in most cases, the customer should have paid more attention to their usage and the bills that they received. That said, I would argue that OFGEM's recent changes have to a large degree made the situation worse not better.

When I was with EDF, they used to do an annual statement and calculate the monthly DD. Then last year, presumably under pressure from OFGEM not to hold on to customers' cash, the monthly DD became variable. This I am sure has led to a degree of complacency amongst customers. For my part, I went along with EDF's calculations but held any variances in the monthly DD in a separate provisions pot in my monthly budget. Over the months, this provision built up to nearly £200 on an annual £800 spend. I left EDF at the end of April and ending up paying them nearly £150 of my 'put away' money. As last winter was warmer than 2012/13, then overall I was about £50 better off for the year. Had I taken EDF's calculations at face value, then I too could have been posting 'unexpected final bill from EDF'.

I am now with Ovo who provide a monthly statement. The accuracy of the statement clearly depends on the customer providing meter readings on the statement date. I can see that I am building up a credit (as one would expect in the summer) and this credit is attracting a 3% interest rate. Ovo have me on a fixed DD payment scheme but I am sure that if the credit/debit amount built up, there would be a conversation about changing the DD.

My point is this: why don't OFGEM force all providers to work in a similar way to Ovo so that customers can budget sensibly for the energy that they are projected to use? Perhaps this is a campaign that MSE would like to take on?

Bluebirdman_of_Alcathays

You make very sensible suggestions.

Unfortunately, they rely on 2 things,

1 - OFGEM pulling their finger out and doing something that doesn't have disastrous consequences

2 - The general public being bothered to read their meters

I doubt either will happen and people will revert to type - blaming the energy companies.

Bark01

OFGEM have not made any specific changes to DD license conditions that I'm aware of.

If suppliers have made changes they will probably fall under Standards of Conduct (SoC), it’s a catch all so Ofgem can investigate and fine energy suppliers (and their representatives)if they are not being seen to treat consumers fairly. It means they don’t have to have specific license conditions for every individual area.

Npower are currently being investigated under SoC for their current billing fiasco. I imagine any issues caused by poor DD behaviour would also be investigated under SoC.

EDF have a number of DD set ups, you can pay a fixed amount that is reviewed twice a year or you can pay the amount shown on your bill and that can either be monthly or quarterly. Not sure when it changed but yes last year your DD would be reviewed each bill and each bill would be triggered by sending in a meter reading, so you could get 12 DD reviews a year. That’s not the case any more.

nomoneytoday

There's nothing stopping anyone from reading their meter, and posting the numbers to their electric city company

System

Bark01 wrote: »

EDF have a number of DD set ups, you can pay a fixed amount that is reviewed twice a year or you can pay the amount shown on your bill and that can either be monthly or quarterly. Not sure when it changed but yes last year your DD would be reviewed each bill and each bill would be triggered by sending in a meter reading, so you could get 12 DD reviews a year. That’s not the case any more.

I have just looked at their DD webpage and I cannot find any reference to various types of DDs. It refers to annual and quarterly reviews

http://www.edfenergy.com/products-services/for-your-home/direct-debit/direct-debit-existing-direct-debit-customers.shtml

The key thing is that they get the reviews right. When I left EDF, my Final Bill had a projection as follows:

Over the next year you could save £417.44 by choosing Direct Debit with Blue+Price Promise August 2015, our cheapest fixed gas tariff available for your meter.

Please note, Blue+Price Promise August
2015 has limited availability and may be withdrawn from sale at any time.

My projected spend on gas at the last annual review was only £480.91 pa.

I just think that OFGEM and the companies are making things un-necessarily complicated.

Cardew

As stated in post#2 there would be far fewer problems with most of the suppliers if customers took any interest in their utility bills.