E.oN Energy Bills - DD Calculations

Legacy_user

As a relatively new E.oN customer, I have just checked my latest energy bill which includes a Personal Energy Projection:

Electricity for the next 12 months Based on your current tariff until it ends and then our E.ON EnergyPlan prices. Includes your discounts and VAT at 5%.
Gas for the next 12 months Based on your current tariff until it ends and then our E.ON EnergyPlan prices. Includes your discounts and VAT at 5%.

Can the E.oN representative provide categorical re-assurance that this monthly increasing personal projection - which in my opinion is not worth the paper that it is printed on - is not being used by E.oN's systems to increase monthly DDs?

The fact that it is printed on the bill worries me and it may explain some of the concerns expressed by others over increasing monthly DD payments.

I confess that I have not seen any other energy supplier produce annual projections each time a bill is raised.

Edit:

My concern about E.oN's method of calculating projected consumption only gets worse after further analysis. The monthly DD that I pay is based on an annual consumption for gas of 10,400kWhs and 2,400kWhs for electricity which is based on a number of years recorded usage.

E.oN's DD Manager recommends that I increase my monthly DD payment by 25% from £58.50 to £73.00 per month to have a zero balance at the end of my Fixed Price Tariff. There is no guidance on E.oN's website on how monthly usage is calculated ( I am talking about kWhs not £s).

Unfortunately for E.oN, but fortunately for me, I take weekly meter readings which show that for the year 1 Jun 2014 to 31 May 2015, I used 8563kWhs of gas and 2406.4kWhs of electricity. The reduction in gas usage is the result of me installing zoned heating controls.

Looking back on the 3 months that I have been with E.oN and comparing them to the same three months in 2014, electricity usage is within 5% and gas usage is down by 17.7%.

I appreciate that when I move away from E.oN, I will only pay for the energy that I have consumed at the agreed fixed tariff rate. However, that is not a defence for what would seem to be a set of algorithms which, at least in my case could lead to a significant credit balance accruing if I agreed the recommended DD increase of 25%.

footyguy

Hengus wrote: »

As a relatively new E.oN customer, I have just checked my latest energy bill which includes a Personal Energy Projection:

Electricity for the next 12 months Based on your current tariff until it ends and then our E.ON EnergyPlan prices. Includes your discounts and VAT at 5%.
Gas for the next 12 months Based on your current tariff until it ends and then our E.ON EnergyPlan prices. Includes your discounts and VAT at 5%.

Can the E.oN representative provide categorical re-assurance that this monthly increasing personal projection - which in my opinion is not worth the paper that it is printed on - is not being used by E.oN's systems to increase monthly DDs?

The fact that it is printed on the bill worries me and it may explain some of the concerns expressed by others over increasing monthly DD payments.

I confess that I have not seen any other energy supplier produce annual projections each time a bill is raised.

As I understand it, all suppliers set their customer's monthly payments according to the tariff currently in force.
If and when the tariff changes, that is when the monthly payments may change.

To follow your assumption, the supplier could be changing the monthly payment every day (assuming the current tariff ends within 12 months) as the anticipated annual cost for the next 12 months will change every day.

The annual projected cost for the next 12 months is in line with Ofgem rules.

System

Thanks. I understand that, but it doesn't explain how E.oN can recommend a 25% DD increase to achieve a zero balance in March 2016 when my metered consumption has actually been considerably less than the assumed annual consumption that I gave E.oN when I switched. I deliberately left the gas consumption at its historic figure as I had no idea what gas savings would actually accrue from zoned heating.

That said, I appreciate that 3 months of consumption may not be a good judge of the remaining 9 but E.oN's algorithm does seem to be heavily weighted in the Company's favour.

footyguy

Hengus wrote: »

Thanks. I understand that, but it doesn't explain how E.oN can recommend a 25% DD increase to achieve a zero balance in March 2016 when my metered consumption has actually been considerably less than the assumed annual consumption that I gave E.oN when I switched. I deliberately left the gas consumption at its historic figure as I had no idea what gas savings would actually accrue from zoned heating.

That said, I appreciate that 3 months of consumption may not be a good judge of the remaining 9 but E.oN's algorithm does seem to be heavily weighted in the Company's favour.

There's a good MSE guide on how to challenge your DD monthly payments if you think they are wrong.
http://www.moneysavingexpert.com/utilities/lower-energy-direct-debits

It is difficult to calculate a years anticipated annual consumption based on only 3 month's usage, especially at this time of year, and it gets even more complicated if the zero balance is expected to be achieved at end on March.

But if you think you are up to the challenge, this Ovo document could be used as a good guide to try and extrapolate the expected cost, and hence calculate appropriate payments.
http://www.ovoenergy.com/wp-content/uploads/2011/06/Understanding_the_link_between_your_Direct_Debit_and_energy_consumption.pdf

System

Ok - I accept the challenge. I have reverse engineered the percentages for gas and electricity as shown in the OVo link provided by Footguy. E.oN's calculations are significantly out with respect to future electricity consumption. Using 2400kWhs as my baseline figure based on my actual consumption of 2406kWhs over the period 1 Jun 14 to 31 May 15, usage March to June 15 shows an actual consumption of 24% compared to Ovo's theoretical consumption of 23.6%.

What I cannot explain is why on my latest bill E.oN shows a figure of 3367kWhs of electricity as my consumption for the past 12 months? This is what has led E.oN's DD Manager to conclude that I need to increase my Monthly DD from £58.50 to £73 per month. So I have a situation where according to my calculations and Ovo's percentage usage forecast, I am on track to use 2400kWhs in the year Mar 15 to Mar 16 but E.oN's systems think that that I will use 1000kWhs more. I would be slightly more trusting of E.oN's calculation were it not for the fact that their account overview predicts that I will spend £5 more on electricity in September than October.

There is clearly something here that E.oN needs to look at.

System

Ok - my head hurts and I might need a little help.

I have queried why E.oN thinks that I should up my monthly DD by 20% to pay for consumption above MY annual projections of 10400kWhs for gas and 2400kWhs for electricity. To put this query into context, my actual recorded gas usage for the previous year was 8643kWhs and electricity 2406kWhs.

The drop in gas consumption is due to the installation of Evohome CH zoning in Jul 14; however, as I had not had a full year's use of the system I gave E.oN my historic average gas consumption for the past few years. My belief was that at end of my fixed term tariff, I would be credit.

E.oN's very clever computer has calculated in the year preceding 1 Jun 15, I have used 3367.43kWhs of electricity and 10295kWhs of gas. It has, presumably, based its increased DD payment on these flawed figures. I have only been a customer since February.

When asked to defend the high projected gas usage, E.oN's response was:

'Since joining us in February, you've used 3357kWh of gas over 110 days. If we look at your daily average use of 30.51kWh per day and use this to work out a full year of gas use, we've calculated that you'd use 11139kWh of gas over the full year.'

If I use Ovo's monthly weighted usage percentages, as given in a post above, then in the period Feb to May, I would have used 42.7% of my annual gas consumption which would equate to c.8000kWhs for the year which is in line with my expectations.

It follows that if Ovo and E.oN had identical tariffs, Ovo would be suggesting a DD reduction whilst E.oN is asking for a 20% increase.

Finally, E.oN has declined to say why their Energy Overview believes that I will use less electricity in October than September, when September has one more hour of daylight per day and one less day in the month.

Our exchange of letters continues. In the spirit of closure, I may offer to pay the 20% monthly DD increase provided E.oN agrees to repay the full balance in March along with the donation of a similar sum to Charity. Similarly, if E.oN’s predictions are correct, then I will make a donation equal to the sought after DD increase (£130) to a Charity of E.oN’s choice.

victor2

Hengus wrote: »

When asked to defend the high projected gas usage, E.oN's response was:

'Since joining us in February, you've used 3357kWh of gas over 110 days. If we look at your daily average use of 30.51kWh per day and use this to work out a full year of gas use, we've calculated that you'd use 11139kWh of gas over the full year.'

I can't believe E.On, of all companies, have stated that. Out of curiosity, I applied their logic to my own actual usage.
Going from 1 Feb this year for 110 days (to 22/5/15), I used 8,015kWh of gas (CH, DHW and hob). With their arithmetic it equates to 25,599kWh of gas for the year ending 22/5/15. My actual usage for that year was 19,245kWh - considerably less than their logic gives!

Can't offer any explanation for their formula, just confirms what anyone who applies just a little common sense and logic would conclude...

Like your closing suggestion, don't suppose E.On will take it up though.

brewerdave

Its completely nonsensical -my last bill in May from EON indicates an estd. usage of ~18500 kwh of gas in the last 12 months -which is ~1500 kwh MORE than I've used in any of the last 5 years! BUT at the same time, the online account is suggesting I reduce my DD !!

EDIT - Seems like these IT systems find it difficult (if not impossible!!) to cope with the likes of us (serial switchers !!))

footyguy

Hengus wrote: »

Ok - my head hurts and I might need a little help.

I have queried why E.oN thinks that I should up my monthly DD by 20% to pay for consumption above MY annual projections of 10400kWhs for gas and 2400kWhs for electricity. To put this query into context, my actual recorded gas usage for the previous year was 8643kWhs and electricity 2406kWhs.

The drop in gas consumption is due to the installation of Evohome CH zoning in Jul 14; however, as I had not had a full year's use of the system I gave E.oN my historic average gas consumption for the past few years. My belief was that at end of my fixed term tariff, I would be credit.

E.oN's very clever computer has calculated in the year preceding 1 Jun 15, I have used 3367.43kWhs of electricity and 10295kWhs of gas. It has, presumably, based its increased DD payment on these flawed figures. I have only been a customer since February.

When asked to defend the high projected gas usage, E.oN's response was:

'Since joining us in February, you've used 3357kWh of gas over 110 days. If we look at your daily average use of 30.51kWh per day and use this to work out a full year of gas use, we've calculated that you'd use 11139kWh of gas over the full year.'

If I use Ovo's monthly weighted usage percentages, as given in a post above, then in the period Feb to May, I would have used 42.7% of my annual gas consumption which would equate to c.8000kWhs for the year which is in line with my expectations.

It follows that if Ovo and E.oN had identical tariffs, Ovo would be suggesting a DD reduction whilst E.oN is asking for a 20% increase.

Finally, E.oN has declined to say why their Energy Overview believes that I will use less electricity in October than September, when September has one more hour of daylight per day and one less day in the month.

Our exchange of letters continues. In the spirit of closure, I may offer to pay the 20% monthly DD increase provided E.oN agrees to repay the full balance in March along with the donation of a similar sum to Charity. Similarly, if E.oN’s predictions are correct, then I will make a donation equal to the sought after DD increase (£130) to a Charity of E.oN’s choice.

Presumably you are at stage 4 from the link I provided earlier.

Unfortunately, the supplier has up to 8 weeks to give you a full & final response, and so I would suggest you also demand that whilst this matter is in dispute, the status quo remains. (i.e. your monthly DD remains unchanged)

As the article says, if you need to go to stage 5, and your complaint is then upheld, you could be awarded compensation of up to £5000! :beer::T:money:

Former_E.ON_Company_Representative:_Malc

Hi Hengus

Thought it might help if I give you a bit of information about both Personal Projections and Monthly Direct Debits. The two are separate and Personal Projections aren't used when working out Monthly Direct Debits.

The Personal Projection is set up to give you an idea of how much we think you'll need to spend on energy for the next 12 months. Its aim is to help you make comparisons with different tariffs both from us and the other suppliers. It'll be on every bill, statement or annual summary. It's based on the details we know at the time. So, if you're on a one year fixed tariff with 9 months left to run, the projected cost will be worked out at 9 months on fixed prices and 3 months on standard prices (EnergyPlan). We use standard prices as this is the tariff we'll put you on unless you tell us differently when the plan ends.

Totally understand, you and many other MSE posters won't go on standard tariffs and will always look for other options either with us or another supplier. At the time we do the projection, though, there's no way we can know what choice you'll make so we'll use EnergyPlan to give an indication only. Sorry to state things I know you're already aware of Hengus but thought it might be useful for others.

Monthly Direct Debits are worked out based on how much energy we think you'll need up to the annual review and current prices. The aim is to have as close as possible to a zero balance by the annual review. The usage is worked out based on past history. As you've not been a customer long, we'll use information given us by the electricity/gas distributor when you switched to us. The longer you're with us the more we'll rely on your readings. If there's a sizeable gap between readings, we'll make seasonal adjustments based on the time of year.

Must admit, I don't agree with the calculation offered by our advisor. Taking 3 months from February isn't the best way to work out usage for the year and it's not how we calculate Monthly Direct Debits.

Each time you use the Direct Debit Manager, it'll work out how much we anticipate you'll need to pay to have a zero balance by the annual review. This may not necessarily be the same time frame as the end of your tariff. You can see when your annual review is at the bottom of the Direct Debit Manager page. Given changes of circumstances, like the zoned heating you mention, the Direct Debit Manager lets you adjust payments to better suit changing needs.

If necessary, we'll only change payments twice a year at the midpoint and annual reviews. At other times, we may recommend a change but leave it up to you to make any alterations. Also at the annual review, any credit balance over a fiver will automatically be sent back to your bank.

Hope this gives you a bit of an insight into how we work out things like Monthly Direct Debits and Personal Projections. Let me know if you need any more details as happy to help.

Malc

System

Malc,

Thank you for your helpful and considered response which bears little comparison to the responses that I have received from E.oN CS to date. It may be helpful to other E.oN customers if you clarified a few points:

‘The Personal Projection is set up to give you an idea of how much we think you'll need to spend on energy for the next 12 months. Its aim is to help you make comparisons with different tariffs both from us and the other suppliers. It'll be on every bill, statement or annual summary. It's based on the details we know at the time. So, if you're on a one year fixed tariff with 9 months left to run, the projected cost will be worked out at 9 months on fixed prices and 3 months on standard prices (EnergyPlan). We use standard prices as this is the tariff we'll put you on unless you tell us differently when the plan ends.’

OK - I accept this point as I appreciate that it is a Licence condition that you display the information in this way. Fortunately, MSE CEC is on hand to give Club Members a much more helpful set of price projections. You haven’t actually explained though how past usage figures are calculated (which I assume are used as the basis for an increased monthly DD)? That said, I am grateful that you agree that your colleague’s formal response was flawed.

‘Monthly Direct Debits are worked out based on how much energy we think you'll need up to the annual review and current prices. The aim is to have as close as possible to a zero balance by the annual review. The usage is worked out based on past history. As you've not been a customer long, we'll use information given us by the electricity/gas distributor when you switched to us. The longer you're with us the more we'll rely on your readings. If there's a sizeable gap between readings, we'll make seasonal adjustments based on the time of year.’

‘Each time you use the Direct Debit Manager, it'll work out how much we anticipate you'll need to pay to have a zero balance by the annual review. This may not necessarily be the same time frame as the end of your tariff. You can see when your annual review is at the bottom of the Direct Debit Manager page. Given changes of circumstances, like the zoned heating you mention, the Direct Debit Manager lets you adjust payments to better suit changing needs’

This is where I must take issue with you. E.oN’s algorithms which underpin this tool are, in my view, concerning. It is just not possible for E.oN to suggest - based on 4 months of recorded usage - that I will need to increase my monthly payment from £58.50 to £73.00 per month - unless it is actually using the logic as described by your colleague.

If E.oN has its own set of weighted monthly average consumption percentages to calculate annual usage then perhaps you would share them with us. The difference that we are talking about here is £190 on a £702 annual fixed contract.

As I have already stated, E.oN’s Energy Overview tool shows that I will use less electricity in October than in September, so how can E.oN customers have faith in a tool which can make such a basic arithmetical mistake? I assume that E.oN hasn’t taken to hacking into personal diaries to check when customers will be away from home? (joke)

In an attempt to resolve the matter, I have asked E.oN CS to provide a detailed breakdown of the calculation that underpins the Energy Overview projection. I am not holding my breath.

Sorry to be so negative, and go on for so long. The E.oN reps on this forum do a lot to enhance E.oN’s reputation; sadly, despite that, I suspect that when I receive E.oN’s next response, it will not be enough to retain my custom. Thank you again for your time.