Electricity Bill: using less does NOT reduce bill

Former_E.ON_Company_Representative:_Malc · 20 November 2015 at 1:47PM

FlatFour wrote: »

Hi,

I'll have to call EON tomorrow and chat to someone I think, the discrepancy between what we use and what we're estimated to have used each month is silly. Consider that when suggesting a future tariff for us, they took the estimated usage into account, rather than actual amount used...well, I simply don't understand why they've never seemed to use either the meter reading taken by the chap who used to call by every month, nor the reading submitted online. I do wonder if, due to some error on their web site for example, they were not getting the information? They do periodically ask for a meter reading at random, so possibly other reading are being lost somehow.

I'll check with them directly, hopefully I can sort out the confusion.

Thanks for the quarterly suggestion, I might enquire about that. We were on a quarterly scheme once before, but had problems with estimate readings even then, as well as being put on entirely the wrong tariff for an extended period due to being told we couldn't switch from Economy 7 - we don't use anything Economy 7 *sigh*

Just following on from my previous post FlatFour. There aren't any issues with our website regarding entering meter readings. You'll be able to see those you've given us by logging in and choosing 'meter readings' from the left hand menu then 'meter reading history.'

Quick heads up about switching to quarterly billing. Lower daily standing charges are only available with a Monthly Direct Debit. Going to quarterly billing will mean an increase and higher bills.

To benefit from Economy 7, you need to use a significant amount of electricity during the cheaper off peak times. The actual amount depends on the region and tariff. If you're not doing this, you'll probably be better off on a single rate tariff. As macman and victor say, this is easily done. No need to change the meter. We just add the day and night usage together and charge at the one rate. You can switch from Economy 7 to single rate online too.

Hope this helps FlatFour.

Malc

joncombe · 20 November 2015 at 2:13PM

This is one of the problems of the OFGEM Tariff "Simplification". They claimed the previous system, where many suppliers had no standing charge, but two different unit prices was confusing and made it difficult to compare. So they ordered this practice to stop and made it that suppliers must list prices only as a standing charge and a unit rate. They also said the standing charge can be zero, but as far as I am aware only a single supplier has a zero standing charge.

So they replaced two charges with two charges and declared that it was now "simpler". Unfortunately many people don't realise the impact of standing charges and simply compare the unit rate. As you have found, there tends to be a correlation between unit rate and standing charge, where a tariff with a low standing charge tends to have a high unit rate, and vice-versa.

If Ofgem was serious about making tariffs simpler to compare, they would have either abolished the standing charge (so there is just a single unit rate) or made the standing charge fixed across all suppliers in the same region. They did neither. So you still need to compare standing charge and unit rate to work out the best deal, which means you have to have an idea of your typical (or expected) usage.

Although the standing charge is supposed to be about recovering "fixed costs", they vary so widely not just across suppliers but even among differng tariffs on the same supplier they are clearly just being used to obfuscate and confuse.

Ofgem then attempted to implement a fudge, namely the "Tariff Comparison Rate" (TCR) which tries to calculate an average single unit cost, factoring in the standard charge and assuming some standard (average?) usage. But since few people will actually be at that average usage, it is a poor tool to use to compare.

As you have found, this new system also means many low users now pay far more overall for their energy than they did previously.

Former_E.ON_Company_Representative:_Malc · 20 November 2015 at 3:21PM

macman wrote: »

Basics. OP, what is your annual kWh usage on each fuel, and on each E7 register? I don't understand your comments about switching from E7-this is done quite simply but may require a meter change. But if this is an all electric house then E7 is by far the cheapest option, so how is the property heated and hot watered? If you do that on a single rate tariff then your bills will increase by around 250%.
Standing charges and unit kWh rates are a red herring because of all the other variables, all you need is your annual kWh usage and your postcode to find the best tariff. Any comp site will do this for you in seconds.

I agree macman, with Economy 7 meters, it's easy to switch from a two rate to a single rate tariff. With us, there's no need to change the meter. As victor says, we add the day and night usage together and charge it all at the one rate. Don't know about other suppliers though.

Also agree, Economy 7 tariffs are generally cost effective in all electric properties. Usually, but not always, those with storage heaters and electric water immersion heaters. The actual amount of electricity that needs to be used at night depends on the region, usage and prices.

Malc

reeac · 20 November 2015 at 3:53PM

My experience with electricity companies is that they are hopeless at giving accurate estimates of required monthly payments. I don't know whether this is deliberate management policy (cash flow) or just incompetence. Our historic domestic electricity consumption is readily available and predictable but that doesn't seem to help.