supplier refuses to bill on meter readings

MyDogMuppet

I am in dispute with Ovo Energy about their billing practices.

As an electricity only user,in a new build eco-house, Ovo Energy refuse to bill me on monthly metered usage. Ovo insist on using something called an EAC ( Estimated Annual Consumption) basis of assessment for their Direct Debits. This is 120% higher than actual usage. In fact their EAC is actually more than 2x the Ofgem published low usage mean of 3200KwH per annum. This is how they extort money from unwary consumers.

Ovo Energy have over 400,000 customers. They can very easily estimate and project annual consumption by individual customers based on actual readings. It's simple statistics.

I have complained to the Energy Services Ombudsman but I wish to raise a formal complaint direct with the Ofgem about Ovo's breach of licence terms.

I have read the Electricity Act 1989 as amended. I'm looking for the provisions that state the electricity companies should\must charge for actual not estimated usage.(The corresponding legislation for Gas is Condition 27 of the Gas Supply Licence.)

Can someone please point me at the exact legal provisions so I can formalise a complaint about their breach of licence terms ?

Thank you

M&C

System

With respect, you may be confusing DD payments and bills. Whether you pay by DD or on production of a statement you only pay for the energy that you actually use. I am with Ovo and they have based my monthly DD on the energy projections that I gave them - based on several years of monitored usage. New builds are complicated because the energy supplier has nothing to base the projected usage on - neither have you. Equally, the newer energy companies are understandably more wary of people building up big debts than their larger competitors.

I do not know when you joined Ovo but their ts and Cs do make it it clear that (a) users pay for energy in advance and (b) users joining in the winter months may have to pay up to 150% of the estimated DD to cover winter usage. The aim being to have a zero credit balance in April. From this point onwards, your DD payment would fall closer to the 1/12 of annual bill figure.

I joined Ovo in April and I have built up a credit balance. I get a monthly bill from Ovo which is just that - a bill. The amount payable is deducted from the credit balance. As Ovo also pay 3% interest on all credit balances: I am therefore at a loss to understand how you think that they are in breach of their licence agreement. The ts and cs that you accepted when you signed up to Ovo are easier than most to understand.

Finally, I am struggling to understand how you have concluded that you will use only 3200kWhs of electricity per year for heat and light. We have solar PV, LED lights etc and two of use use about 2400kwhs of electricity pa. We have gas CH and use gas for cooking. My guess is that 3200kWhs for an ECO home is very much on the low side even for an all electric home.

daveyjp

If you want to pay on meter readings go on a quarterly bill account. If your energy useage is low the marginal saving in having a DD discount won't be worth worrying about.

maas

I dont think the OP is confused with DD and bills.

I think it boils down to;

If the OP uses £50 of energy (inc standing charges) each month he wants to be able to set his DD to reflect the £50 not some higher estimation of £70 (even if this surplus goes on the account as a credit).

Nada666

daveyjp wrote: »

If you want to pay on meter readings go on a quarterly bill account. If your energy useage is low the marginal saving in having a DD discount won't be worth worrying about.

Not true. Now that direct debit discounts often come off only standing charges they can represent 20, 30 or 40%* of the bill for low users.

* okay, a little high, more just 20 to 30%. Still significantly more than the 6% for an average user.

JJ_Egan

Ovo pay 3% on credit balances .

System

maas wrote: »

I dont think the OP is confused with DD and bills.

I think it boils down to;

If the OP uses £50 of energy (inc standing charges) each month he wants to be able to set his DD to reflect the £50 not some higher estimation of £70 (even if this surplus goes on the account as a credit).

If what you say is true, then the OP has chosen the wrong supplier for his energy. Ovo's ts and cs make it clear that energy has to be paid for in advance not in arrears. Ovo does offer a flexible DD facility with the user paying between 75 and 150% of the estimated monthly DD. If the OP is right and his usage is less than the estimated amount then a smaller credit balance will accrue if he choses to pay less per month than the Ovo-calculated monthly DD. That said, Ovo, in its ts and cs, reserves the right to increase the DD monthly amount if a debt builds up - as do all energy companies.

maas

For my circumstances, I've been with OVO since May and my monthly usage is £50-£60. My DD is set at £81. My current balance is £179 in credit after just a handful of months.

Even including the usage for this month, I've built up a surplus of £120 and we're half way through winter. If I go to flexible DD and try to change the DD, the DD range I am allowed to change is between £80-£160!

Clearly my last 6 bills have all been £50-£60, I dont go anywhere near £80 and even if I did they have a credit of £120 to play with. Yet their flexible DD wont let me change it to a more appropriate DD.

However, unlike the OP I'm not particularly stressed over it, as others have pointed out I'm getting 3% interest.

energyworker

Basically those are the T&C on the energy contract you signed. I don't understand what you hope going to the ombudsman and ofgem will achieve. To begin with Ofgem do not take consumer complaints, they will merely direct you to the Ombudsman. Ombudsman will not take your complaint as there is no deadlock situation, you are merely unhappy with the terms of the contract.

The situation you have described is not OVO billing you on estimates, it is OVO basing your fixed direct debit on what little knowledge they have of your expected usage to protect themselves from your account falling in to arrears. The idea that they are somehow breaking the law is incorrect.

I would suggest that if the contract you have signed is unsuitable then perhaps you should seek another supplier who offer a variable direct debit.

[Deleted User]

As an all electric property maybe Ovo are disputing the meter readings. I go in many all electric new builds and in many of them the eco 7 meters in these places are being billed incorrectly.. Too low because the day and night usage is being billed reversed. The amount the OP is paying, even in a well insulated place, is too low for both heating/hot water and the usual modern electric guzzling appliances. OP, if you have a 2 rate electric eco7 meter check they are billing the correct rate for the correct period. The best suppliers get this wrong constantly, B.Gas especially, so a fairly new outfit like Ovo are certainly going to mess this up also

Cardew

MyDogMuppet wrote: »

Ovo insist on using something called an EAC ( Estimated Annual Consumption) basis of assessment for their Direct Debits. This is 120% higher than actual usage. In fact their EAC is actually more than 2x the Ofgem published low usage mean of 3200KwH per annum. This is how they extort money from unwary consumers.

That 3,200kWh is not for an all electric property.


Indeed how can Ofgem give a average figure for heating/hot water for a bedsit or a 8 bed mansion.


As indicated above, it is not mandatory that you join OVO if you don't like their terms and conditions.


In any case paying an initially higher DD doesn't mean you pay more as your DD will be adjusted as your consumption pattern becomes clearer over the first 12 months and you should pay no more than your annual bill.