Using more energy

ccarr32051

Hi
I currently have a variable fixed energy deal that is nearing the end of its term. On the energy savings club most of the good deals are fixed. I know that the savings you get are based on the previous years energy readings but my question is what if you use more energy than those supplied readings. Will your DD increase? Or what if you use less energy than those reading?
At the moment I am on the BG collective feb 2017 fix and some of my bill during the summer months were like £12 for Gas and £20 for electricity for a month were some deals ar say £32 for both.
Thanks
ccarr32051

CashStrapped

As you say, the figures you put in are only to compare with the tariff you had and your usage for last year.

If your overall usage is up, then you pay more. If it is less, you pay less.

The Direct Debit is just a way to spread the cost, it is nothing to do with your usage directly. A direct debit is designed to overpay in summer when usage is low, building up a credit. It will underpay in winter (when usage is high), but use up the surplus credit.

Never request a credit balance back just before winter.

A way to make your direct debit more accurate is to give a meter reading once a month.

If the energy company, through your meter readings predict you will use more than anticipated, your direct debit will go up to compensate.

None of this affects the tariff you are on.

It is the tariff and how much you use that determines your bills.

The direct debit just spreads the cost so you do not have very low bills in summer and massive bills in winter. It is meant to help maintain the same monthly payment year round.

System

Just to be clear, on a fixed tariff (as opposed to a supplier's standard variable tariff) the length of the contract; the standing charge and the cost of each unit (kWh) are fixed.

If you sign up to a contract based on say 10000 kWhs of gas then your initial monthly DD will be based on the cost of this gas. If you use less than 10000 kWhs then you will pay less. Use more, then you pay more. These are not all 'you can eat' contracts.

Any money that you pay by DD is money paid on account, you will be billed for your actual use. It follows that your bill will be higher over Winter, but less in the Summer. Your supplier will review your monthly payment at the 6 month point to try to achieve a zero balance at the end of your contract term.

By way of example. Your supplier assesses that you will use £960 of energy in a year. Your DD is set at £80 per month.

At the 6 month point, your total energy cost is re-assessed to be closer to £1080 for the year. You have already paid 6 by £80 or £480 so the cost for the remaining 6 months is £1080 - £480 or £600, To achieve a zero balance, your DD would increased to £100.

Note: this is not an exact science. Your supplier doesn't have a crystal ball so if you want to avoid shocks, you must provide a meter reading at least once a month.

ccarr32051

Thanks Hengus and cash strapped for the info but just to clarify. On the energy club there are tariffs that are fixed and variable. On a fixed tariff do you supply monthly readings and if energy is less you pay less? I thought that was the variable tariff. My wife does not like the idea of paing say £64 for both in the summer months when at present its say £30 for both. I think one of the better tariff for us is the EDF one on the energy club

SpotlandRules

You may be paying £64 for both in the summer months, when your usage is a lot less than this. However, in the winter months, when your usage is far greater than £64, you will still be paying £64.

I would rather pay that bit extra over summer, rather than having to find a large amount over winter.

[Deleted User]

@ccarr32051

Definitions:
VARIABLE TARIFF - The price of 1KwH of energy (gas and or electricity) and/or the Daily Standing Charge can be changed by the supplier at anytime in the future by giving notice (minimum 30 days)

FIXED TARIFF - The price of 1KwH of energy (gas and or electricity) and/or the Daily Standing Charge is fixed at the same price for the whole of the length of the Fixed Calendar Term of the tariff.


How you pay for the energy used and the daily standing charge has no bearing on the tariff type.

ccarr32051

Many thanks for all the info. Clearer now