How accurate are our energy bills?

Methusela

Who is responsible for checking that our energy bills are accurate? When the energy supply industry was privatised many decades ago the idea was that a large number of suppliers would buy gas and electricity from a few main tranporters, then sell these products on to the general public. This is a bit like a shop keeper who buys goods at wholesale prices and sells them at a higher price, covering his costs and adding a profit. You might be excused for believing this should be a fairly simple exercise, with little chance of any serious mistakes being made. Indeed, after all the years they have been producing gas and electricity bills for their customers you would expect that suppliers should by now have gained sufficient expertise to make mistakes virtually impossible. Sadly my own experience shows that they can - and regularly do - make some very serious mistakes and worse still they rarely admit to those mistakes when challenged.

It is also a sad fact that only a tiny minority of the Great British Public are able to read their own meters, let alone check the bills presented to them by their suppliers, so it is vital that those bills should contain no mistakes. But in spite of this, no organisation exists which has responsibility for checking on the levels of accuracy represented within our energy bills.

As a retired electrical engineer I am lucky to be able to check my own bills. When I recently switched to a new provider I received a final bill from my previous provider, covering an eleven month period. They demanded £1,116 which they would take from my bank account by Direct Debit. I thought the bill seemed very high and so decided to check it in detail . My checks showed that the bill should have been only £643 and that I was being overcharged by £473 or 74% over the correct amount. What worries me most is that around 98% of the UK population would have had to pay this bill and just grumble, to no avail, that it seemed high.

When I challenged this incorrect bill, the supplier at first refused to accept that there was anything wrong with it. After I had pointed out two serious errors in the bill, he explained one as being due to “human error”, as a result of which I had been charged twice for the electricity used. The second error he explained as being due to “the system” making its own decision to replace an accurate meter reading with a completely wrong estimated reading. This resulted in my being charged almost double for the gas I had consumed. No human being thought to question the computer’s decision before the bill was sent out, as the supplier’s administrative staff believed it was impossible for their computer to make mistakes.

This was not the first time I had found serious errors in my bills; nor have those errors been confined to one particular supplier, a fact which makes me wonder how many incorrect bills people have been forced to pay, simply because no one is responsible for checking the accuracy of bills before they are sent out and very few of us have the ability to check them ourselves.

Isn’t it time that the wealthy energy industry was forced to provide an impartial service to the public, to randomly check bills on a large scale, across all energy suppliers, with the aim of producing a league table to show which energy providers have the most accurate billing procedures and which are the worst? Those league tables would benefit the public when trying to choose between different suppliers, in the same way that they are now helped to choose a school for their children. Most of us presently switch to providers who appear to offer the greatest saving but as my own case shows, the supplier who quoted me £200 a year saving when I signed up actually ended up charging me £643 more than they should have done. Hardly what you would call a saving!

Wouldn’t it be better to choose a supplier whose charges might be slightly more expensive per kilowatt hour but who the league table shows to be 100% accurate in their billing, rather than a slightly cheaper one whose bills are shown to be inaccurate? Such a league table would have the benefit of forcing uncaring suppliers to improve the accuracy of their bills, to the benefit of everyone who uses gas and electricity.

Bluebirdman_of_Alcathays

Only a tiny minority can read a meter?! Source? You don't need to be an electrical engineer to spot estimated reads - they have a big E on them. And no, bills don't get checked by a human before being dispatched. If you're willing to pay the extra it will cost to manually check 20 million bills a quarter, be my guest, however I would wager most people aren't.

System

I am retired as well and I can honestly say - having moved home 23 times in 40 years - that I have never had an erroneous bill. Yes, I may have had a bill based on estimated readings but estimated bills are just that estimated. More often than not a simple call to the supplier prior to the internet, or an online meter reading now results in a revised bill.

As far as savings go, then blame Ofgem not the suppliers. The method of calculating savings has to be based on some assumptions. I do not agree with Ofgem's methodology; however, I accept the argument that the savings shown are accurate for all consumers except for those on a fixed tariff with LESS than 12 months to run.

Every process that Ofgem forces on to the suppliers carries a cost. All costs are eventually passed on to the customers.

Having said that, I accept that things can go wrong. Most mistakes reported on this forum relate to meter changes and switching. A less onerous obligation would be for Ofgem to require suppliers to report errors made re meters when setting up accounts and post-meter changes, and the number of occasions that a switch hasn't gone through in the prescribed 35 days from application (a supply licence obligation). For example, I recently exchanged e-mails with a supplier that told me that an IGT gas supply could not go through in less than 6 weeks - more usually 12 weeks. It took the gaining supplier to persuade them that the switch had actually gone through in 22 days from application which included the Christmas break.

In sum, it is the industry procedures that need to be addressed. That said, at the end of the day, it is me that has to check the accuracy of all my bills - whether it be gas or electricity or the double scanning of an item in a supermarket yesterday.

Methusela

Hi Bluebirdman,
You seem to have missed the point of my post. I don’t remember suggesting that every single energy bill out of the 20M you say are produced every quarter (source?) should be manually checked, nor that we the consumer should cover the cost of such necessary checks.

What I did suggest is that a random sample of each supplier’s bills should be independently checked for accuracy on a regular basis. Over a period of time the results of those checks could be used to create a league table showing which suppliers are taking seriously their responsibility to produce accurate bills and which suppliers are failing to do so.

If the suppliers themselves are not prepared to check their bills before they are issued, surely the industry as a whole should be made to set aside a tiny proportion of their vast profits, to provide funding for such a worthy, independent exercise?

Maybe you personally would be happy to receive bills which include human and computer errors adding 74% to the bill’s total? I’m not sure how many other consumers would agree with your suggestion that we should all happily pay up and shut up, because to do anything else might cost the industry money.

Hi Hengus,
I agree that most mistakes probably occur when meters are changed or when consumers switch provider. But since the government, along with Martin and many others, are constantly urging us to switch providers in order to save money doesn’t your logic mean that the continual switching process will in itself create a tremendous potential for incorrect bills?

JJ_Egan

Do not the customers themselves create this possible error by not giving frequent meter readings .
Money spent on checking bills as suggested would be better spent on teaching the public finance basics and how to use the comparison sites .
Multiple posts on here from users who fail to understand that an estimated yearly amount and its relevant direct debit is just that an estimate not a unit cost .

System

JJ_Egan wrote: »

Do not the customers themselves create this possible error by not giving frequent meter readings .
Money spent on checking bills as suggested would be better spent on teaching the public finance basics and how to use the comparison sites .
Multiple posts on here from users who fail to understand that an estimated yearly amount and its relevant direct debit is just that an estimate not a unit cost .

I agree. MSE and the Press have played up the CA story as something that is down to the suppliers when in fact customer lethargy is to blame. The said, expressions like 'fixed price tariffs and 'fixed DDs' do not help consumer understanding. These are not 'all you can eat contracts'.

My daughter is an auditor and she often points out that auditors only sample processes and, at the end of the day, compliance etc is down to the Company. One might argue that recording complaints against a supplier is as good a metric as any other as unresolved billing errors generally result in a complaint.

I am not a great fan of smart meters but the roll out of these would get round the problem of people not bothering to read their meters. It might though create a host of other issues if they are as hackable as some experts now believe them to be.

[Deleted User]

I've had two wrong bills in the last 15 years. One recently, which was due to the meter reader transposing two digits, got sorted with a single phone call, and the other one dragged on for about a year and ended up with them threatening court action. When that happened I rang the regulator and it got sorted promptly, they wrote off the bill altogether, and sent me a £30 cheque for my trouble.

If you're the sort of person who just assumes people are doing their job properly and never checks up on anything, you're going to have problems with all sorts of organisations, not just energy suppliers. I read my bills & meters every time before paying, check credit card/bank statements, prescriptions etc.

Shrimply

Every time I take readings, which I do monthly, I plug them into a spreadsheet. I know how much my bill is going to be before I get it and can check for any issues. It takes a few seconds... Why would I choose to pay more to a company who have been proven to produce a greater percentage of accurate bills rather than just check myself. Not to mention the increased costs related to funding the research in the first place.

Mistakes happen, and energy companies have some responsibility for making sure they don't. But really people should be taking responsibility for their own finances, I have little sympathy for anyone who, is capable of doing so, and doesn't check they aren't paying more than they are supposed to be for anything.

Robin9

Methusela – I am surprised to hear you, as a retired engineer, making such sweeping generalizations from a small amount of data. You quote only two instances – only the double billing can be described as an error – out of the many hundreds of bills you will have received in your lifetime.

What constitutes a wrong bill? Just how would an audit pick up the wrong meter reading taken by a meter reader, or given online by a customer,

molerat

I am a serial switcher and I have only ever had a couple of minor problems - one when on a meter change the wrong end read was submitted but as I am a regular meter reader and the correct read was on the ticket on the meter problem fixed easily and now my losing supplier has used an estimated close reading but seems to be correcting it.

I have been hundreds of pounds in debt to energy suppliers due to low DDs but was I worried - no - as I read my meter regularly, work out my account status and pay the correct amount monthly into my interest paying budget account. If the energy company choose not to take it and leave it earning interest whilst giving me an interest free loan who am I to argue.

jcontest

I am not sure the consumers are fully to blame for estimated bills. I do put a lot of blame on the consumers, and honestly, reading numbers from the meter is not something that is difficult for most people to do, basic math isn't even needed, only the ability to read and perhaps write down numbers and letters. Suppliers need to push customers to report more often. One of my suppliers in the past would only take readings from G4S as they didn't trust my phone readings, so G4S would phone me and get readings then pass them to my supplier! Emails and Text Messages are virtually free so why not remind customers to report these readings?

The only real errors I have ever had are where there are "High" and "Low" rates, even if you go on vacation for two months and switch the breaker off you might find that after supplying a meter read that they expect that minimum "High" usage amount to be used and charge you for it regardless.

Double billing is bad, I would really make a lot of complaints about that as the person or system who made that error needs to have some serious training or fix put in place.

I personally do think that the system is probably not robust enough, my whole street has usage meters on it (I seen them inside the distribution building one day) and if it's like that all over the UK then it should be quite easy for all of the suppliers to feed their usage into a central database and pick out values that are wrong. This type of data scrape tends to be expensive and would only benefit the consumer (that means its not likely to ever happen).

The only way you could be sure of it all would be to have multiple meters per home, all smart, all automated, with major errors flagging up a technician who will help users fix the problem. That's not going to happen any time soon at all. My solar inverter shows output and it's about 10% higher than my actual meter, I know one of them is in error but thanks to the way the UK energy sector works then I am stuck until one of them either dies, or gets so far wrong that it ends up costing someone a lot of money.

Heck, In another thread someone mentions a faulty gas regulator used across the UK that got recalled due to the likelihood of a gas leak. I called national grid, my old supplier, my new supplier, and stopped another van from yet another supplier. All of them had the same thing to say to me. If its not leaking gas then they don't see a need to fix it, none of them will replace a recalled device!

Sure there is a lot in the energy sector that can be improved, I feel like the OP has had some bad luck too, but I don't think that the failures he is listing is something that would be caught doing random checks (just my view).