Was the MSE Collective Switch a sprat to catch a mackerel?

Former_E.ON_Company_Representative:_Malc

Ilikesaving wrote: »

Before the MSE collective switch my supplier for gas & electricity was EDF with a monthly DD of £60.

I was encouraged to see what savings I could make by taking part in the MSE Collective Switch.

After supplying the required usage figures I was quoted £43.50 monthly DD if I went with E.ON.

Now I have sent my second meter reading to E.ON it has decided my monthly DD must be increased to £65.

I'm feeling annoyed that I was lead to believe the MSE collective switch would save me money when it has actually caused me to be in debt to E.ON

Have other MSE forumnists noticed this?

Ilikesaving wrote: »

Thanks for your responses, particularly Hengus & Dan L.
I am a low usage customer as I live on my own & no one is at home during working hours.
I supplied the MSE collective switch with the annual usage figures direct from my EDF account for which I was paying £60 per month.
The MSE collective switch said E.ON would supply the same usage for £43.50 per month.
I'd be an idiot to ignore their offer.
Now six months in they have decided I must pay £65 per month as I am already in debt to them.
They are the experts in working out how much they can supply energy for.......not me.
I feel I have been duped by the collective switch & or E.ON

Hi Ilikesaving

Thought I might be able to add a bit to what's already been said. Our Monthly Direct Debits are spread over a full 12 months from the time they're first set up. They're based on past usage and current prices and aim to achieve as near as possible to a zero balance by the time of the annual review. We review arrangements regularly but will only make changes at the midpoint and annual reviews. At the other times, we may recommend a change but will leave it up to you to make the alterations.

Dan makes a good point. The MSE Collective tariff kicked in during the winter months so it's likely higher usage between the start and now may have caused a bit of a spike at the mid-term review. This could've resulted in a shortfall leading to the debt you mention. Going forward, this debt will be included in the revised payments and spread over the months up to the annual review. This, in turn, will increase the payments.

Lower usage during the summer will hopefully return things to the level of usage you anticipated when switching last year. If it turns out £43.50 is accurate, I'd expect a credit balance at the annual review. In this case, anything over a fiver will automatically be sent back to your bank. If not and you're actually using more, the new payments will hopefully cover this so the account doesn't build up too much debt.

If you've registered with our website, you can take more control of the arrangement, including altering the payments, through the 'Direct Debit Manager.' Comes in handy should circumstances change. Provided the account is billed up to the latest meter readings, payments can be changed by up to 20 per cent up or down. By up to 5 per cent up or down without readings. Before confirming the new amount, we'll let you know by how much we anticipate the account will be in credit/debit by the time of the annual review if payments are changed but usage doesn't alter as expected.

Must admit Ilikesaving, I'm speculating a bit here but hope it's of interest.

Malc

victor2

Ilikesaving wrote: »

Before the MSE collective switch my supplier for gas & electricity was EDF with a monthly DD of £60.

I was encouraged to see what savings I could make by taking part in the MSE Collective Switch.

After supplying the required usage figures I was quoted £43.50 monthly DD if I went with E.ON.

Now I have sent my second meter reading to E.ON it has decided my monthly DD must be increased to £65.

I'm feeling annoyed that I was lead to believe the MSE collective switch would save me money when it has actually caused me to be in debt to E.ON

Have other MSE forumnists noticed this?

Dead easy to check.
You have your annual usage from EDF. Calculate what that would cost on the EDF tariff, then do the same on E.On's tariff. Divide each answer by 12 and there's your monthly cost, for the same usage of course.
It could be that E.On have used an incorrect assumption when calculating your new monthly payment and/or they could be catching up on the lower payments you've already paid.

Sam_Fallow

Sam_Fallow wrote: »

So far Eon haven't made any changes to my monthly charge but I'll be watching.

I've had a meter reading a couple of days ago and now E-on have adjusted my monthly DD. It's gone from £57 to £77 per month. It has been explained that this is to aim for a zero balance at the end of the contract year. So for the next quarter I'm going to be using next to nothing in comparison to the winter months, yet paying an extra 20 a month for it.

I know the case is that you use it, you pay for it and quite right. No argument here. What I want is a system where an energy supplier can make a payment plan that is consistent and vaguely accurate. That is supposed to be what the energy providers are supposed to do, it's almost the only thing we ask them to do.

My guess is that I'll end up in credit by the end. I'm not going to do the sums today, so don't ask, but maybe I'll just look for a supplier that does the old quarterly billing system. At least it's only a fiver (per fuel) to leave E-on.

Former_E.ON_Company_Representative:_Malc

Hi Sam Fallow

You can still pay quarterly if you like. It's just that you'll be left with higher Standing Charges as the lower rates only apply when paying with a Monthly Direct Debit.

Monthly Direct Debits are worked out based on the annual review. As the MSE Collective Tariff was only available towards the end of last year, I suspect your annual review will be around the middle of next winter. If this is the case, an allowance for some higher winter usage will be used when looking at what we think payments need to be to reach something like a zero balance at the 12 month point.

Given the changeable nature of individual usage, payments are estimated based on past usage and current prices. That's why we introduced the 'Direct Debit Manager' I mentioned in my reply to Ilikesaving above. It's to give customers a bit more control over arrangements. I'd have a look at this tool and if you feel the new payments are too much for what you're using, pop in some meter readings and readjust the amount a bit.

Hope this is of interest.

Malc

New2Forum

Can I add my voice to those baffled by the E.On estimates/direct debits?


I aim for my usage to be in the ballpark of 10 kWh per day, so when I switched, I would almost certainly have estimated my usage to have been 3,560 kWh per year. I give a reading on the 1st of each month, every month. The estimated annual usage on the bills from E.On make absolutely zero sense to me.


My switch went through on 1st December 2014, and I have had bills through monthly since then (Except 1st May 2015 - when I submitted my meter reading I forgot to click to recalculate my bill). This is how the estimated annual usage has gone and actual monthly usage, as displayed on the E.On bill:


December 30th 2014: Usage: 304 kWh (Estimated 12 month usage 8,273 kWh)
February 1st 2015: Usage: 286 kWh (Estimated 12 month usage 7,050 kWh)
March 1st 2015: Usage: 278 kWh (Estimated 12 month usage 6,310 kWh)
April 1st 2015: Usage 289 kWh (Estimated 12 month usage 5,400 kWh)
June 1st 2015: Usage 552 kWh (Estimated 12 month usage 4,835 kWh)
July 1st 2015: Usage 337 kWh (Estimated 12 month usage 5,309 kWh)


In the 212 days between 1st December 2014 and 1st July 2015 my total usage has been 2,046 kWh.


How on earth did they ever estimate that my usage would be over 8,000 kWh?
How on earth do they still estimate that my usage will be over 5,000 kWh?


If anyone can explain to me where their estimates come from, I'd love to hear it!


My account is, so far broadly balanced. My 1st July balance show as £31.62 and that excludes an expected direct debit payment on 1st July of £39.50 which will presumably put my account £7.88 into credit.


HOWEVER, on the July 2015 bill I have a note saying that "We'd like to change your Direct Debit to £82.00" [from £39.50 per month). WHY? It makes no sense to me!


EDIT: Perhaps the simplest way to look at how crazy the estimate is, is to look at the actual daily usage since 1st December 2015 and E.Ons estimated daily usage to the end of the year (presumably 30th November 2015).
1st December 2014 to 1st July 2015: Actual usage was 9.65 kWh per day
1st July 2015 to 30th November 2015: E.On estimated usage is 34.93 kWh per day
What makes E.On think that my usage will more than treble?

New2Forum

I also manage my elderly parents electric for them, not as extreme, but they have a similar situation.


Their actual usage from 5th December 2014 until 1st July 2015 has been 2,656 kWh, or 12.77 kWh per day.
The latest annual estimate from E.On is 5,792 kWh.
From 1st July 2015 to 4th December 2015, E.On estimate their daily usage to be 20.10 kWh per day - E.On estimating that their usage will increase by nearly 60%.
It cannot be justified by any kind of seasonality - in December 2014 their usage was 14.8 kWh per day and in January 2015 their usage was 11.6 kWh per day.


Their last bill was £46.02, excluding the expected 1st July Direct Debit payment of £51 which should put their account £4.98 in credit, yet their July 1st Bill wants to increase their direct debit from £51 per month to £81 per month. WHY? The current direct debit looks pretty accurate, another £30 per month will lead to the account clearly having a large credit balance at the end of the year.


I will add as well that the online Direct Debit manager won't let the direct debit be reduced enough to be reasonable and in line with their actual annual expected usage (and the same goes for mine)

System

I regret to say that a number of E.oN's new customers are in the same boat with widely erratic annual energy usage figures being used in E.oN's favour. The CS representatives on this site and at E.oN will defend their system with words such as 'past usage' etc. As a frequent switcher, I have never encountered this type of problem before with any other energy company. FWiW, I have now moved on, but I assess that that if I had agreed with E.oN's review, I would have paid them them 25% more than I needed to over a 12 month period. Its no surprise to me that E.oN's last quartile complaints number is on the increase again.

Edit:

The problem, as I see it, relates to the projection of past annual usage which E.oN has suggested in other posts comes from 'industry'. My guess is that E.oN's systems default to the average usage for the type of property - rather than take at face value the projected energy assumptions provided by the customer. My projected usage is well short of the norm for my type of property as we have a woodburning stove; smart energy controls and PV Solar.

New2Forum

Hengus wrote: »

The CS representatives on this site and at E.oN will defend their system with words such as 'past usage' etc.

Thanks for your feedback Hengus


My full past usage (as held by E.On) is listed in the post, so I hope they don't dare try and use that defence.....


To be honest, on a personal level, I'm not too fussed about it - I know I'll keep on top of it, and I know I'll get the money back pretty quickly - what I am concerned about, is the, apparent systematic issue here where there appears zero common sense or legitimacy to their estimates and the impact on people who won't keep on top of it as much as I do......


There seems a clear discrepancy between the stated goal of aiming for a zero balance over a 12 month period and what is happening in practice.

New2Forum

Hengus wrote: »

... That said, if asked, OFGEM requires energy companies to demonstrate how the new figure was calculated. As I can see from the DD Manager that I am looking at a possible 25% DD increase when I can show that my actual energy consumption is well below the projected figure, I have asked E.oN to show me their sums. I suggest that you do the same.

Out of interest, what did they come back with?

System

New2Forum wrote: »

Out of interest, what did they come back with?

A rather bizarre, and final, offer to provide me with information on how my monthly DD was calculated. My reading of this response was that, if accepted, I would effectively waive my right to refer the matter to the EO. No mention was made of past annual usage; errors in the projected monthly overview or future DD payments.