Clarity of charges

nanakathy

Hello Forum, this is my first post and all comments would be appreciated.  I am feeling very annoyed with Octopus Energy at the moment and would like other forum members’ views.

My dual fuel energy account was with Avro and now, thanks to Ofgem, like thousands of others, with Octopus.  I was quite impressed with Octopus and the frequency I was kept informed of how the transfer was proceeding.  I have had no problems with double direct debits and to date, everything seems to be running smoothly.  I was quoted the new prices right at the beginning - and I copy and paste: 

• A standing charge of 23.76p per day and 20.12p/kWh for your electricity.
• A standing charge of 26.11p per day and 3.94p/kWh for your gas.
• All prices quoted inclusive of VAT

Since the commencement of my account on 26 September, I have submitted monthly meter readings to Octopus for both gas and electricity and have kept a running total of the charges accruing.  I have also been paying a regular monthly direct debit since 1st October.  I submitted my monthly readings for December on the 27th and yesterday received my first on-line statement.  I was rather shocked to see the gas bill charged at £60 MORE than I had estimated, although the electricity bill matched my estimate.

My calculations were based on the units used multiplied by the price quoted per kWh plus the standing charge multiplied by the number of days.  Thus I could not understand why there was such a big difference in the gas bill although the electricity was correct.  I then looked at the small print against the gas bill, again I copy and paste….

* Your energy usage is calculated from your gas consumption using a standard industry formula:

Units Consumed (Cubic Metres)

× Volume Correction (for temperature & pressure)

× Calorific Value (energy in each m3 of gas)

÷ 3.6 (convert from joules) ≈ Usage (in kWh)

For you:

153.7 × 1.02264 × 39.3 ÷ 3.6 = 1715.9

Is this clear to anyone? Is it standard practice to do this? This was not made clear, or even mentioned on any of the correspondence from Octopus during the transfer.  I have never come across this with other energy companies and you can understand my shock when having estimated my gas costs to be approximately £31 and being advised by Octopus that they are £92.33.  Can anyone tell me on this forum why the gas usage is worked out differently to the electricity charges, ie units used x 20.12p + (no of days x 23.76p)? Do other energy companies adopt this procedure?  Prior to my transfer to Avro/Octopus I was with Shell Energy, E.ON. and British Gas, and I cannot recall any of these companies using this formula to work out gas consumption.  The price quoted for kWh was used for both gas and electricity consumption, as far as I remember.  

I do intend to take this matter up with Octopus, but would really appreciate any helpful comments on this post before I do, in particular, do I have a valid complaint about their lack of clarity and confusing charges?  Thanks in anticipation……

MWT

All of this is very normal and correct, but it raises a question about where you are getting the meter readings that you are submitting...

If you are giving those gas readings in kWh then you are doing it wrong.

Could you take a photo of your meter showing the current reading and post it here just to be sure... ?

The calculation is based on your meter reading being in cubic meters (m3) so that is what it should say on  your meter.

All of this is fairly unbelievable though or you would have had problems with previous providers...

[Deleted User]

The gas meter reading that you provide is the volume of the gas used in your home. All suppliers have to do a volume to kWh conversion based on the type of meter that you have (cubic metre or cubic foot) and the average calorific value of the gas supplied during the billing period. This value varies day-to-day. Under Ofgem rules the average calorific value has to be truncated to one decimal point. For example, if the average calorific value was 39.75 then your bill would show 39.7.

As suggested, you need to check the volume conversion used matches your meter type.

nanakathy

Thanks MWT and Dolor…. here is a photo of my gas meter……

You have made it clearer for me and it does seem as though the volume conversion used matches my meter type.

I just find it really confusing that this has to be done with the gas and not with the electric 😩

[Deleted User]

Your photo shows a metric meter and the conversion used by Octopus is correct. Had the meter been in cubic feet, then you would have billed for over 4000kWhs. 

Ofgem decided that as gas supplied can have a calorific value in the range 37.5 to 43MJ/M3 that it was only fair to bill using the average calorific value of the gas supplied. The higher the calorific value then the greater the heat that you get out of one cubic metre of gas.

matelodave

It has always been done this way with gas as it can only be measured by volume and the energy content varies with it's temperature, pressure and calorific value(which can vary by quite a bit)

Even smart meters (which that isn't) still measure it by volume rather than kwh although the In Home Device tries to do a rough and ready calculation to give the customer an idea of the cost but it isn't  accurate. Only the volume measured through the meter is used for billing using the similar calculation that you've described

nanakathy

Very many thanks for your comments and help.  I have now checked back and looked at my previous gas bills from EON and, yes, they were also calculated using the calorific value.  I think it just came as a bit of a shock because it was much higher than I thought it would be, even taking into account the increased charges.  Oh well, the heated body warmer will certainly come in useful over the next few months! 

[Deleted User]

nanakathy said:

Very many thanks for your comments and help.  I have now checked back and looked at my previous gas bills from EON and, yes, they were also calculated using the calorific value.  I think it just came as a bit of a shock because it was much higher than I thought it would be, even taking into account the increased charges.  Oh well, the heated body warmer will certainly come in useful over the next few months! 

I think that we are all paying more attention to our bills. Eighteen months ago, I was paying 1.79p/kWh for gas.

FreeBear

nanakathy said: Oh well, the heated body warmer will certainly come in useful over the next few months! 

A cat (other warm fluffy animals available) is good for keeping a lap warm..

http://www.c60design.co.uk/many-cats-take-heat-passive-house/

Sea_Shell

nanakathy said:

Very many thanks for your comments and help.  I have now checked back and looked at my previous gas bills from EON and, yes, they were also calculated using the calorific value.  I think it just came as a bit of a shock because it was much higher than I thought it would be, even taking into account the increased charges.  Oh well, the heated body warmer will certainly come in useful over the next few months! 

Now that the calorific value element has been clarified, are you now able to reconcile your calculations to what Octopus have charged?

[Deleted User]

Hi,

Your energy usage is calculated from your gas consumption using a standard industry formula:

Units Consumed (Cubic Metres)

× Volume Correction (for temperature & pressure)

× Calorific Value (energy in each m3 of gas)

÷ 3.6 (convert from joules) ≈ Usage (in kWh)

For you:153.7 × 1.02264 × 39.3 ÷ 3.6 = 1715.9

For a quick calculation just multiply units used by 11.2, though in above, it would be 11.163955.