Is it possible for home owners to buy energy in advance?

wild666

ey143 said:

Does anyone know if it is possible to pre-pay for energy in advance?  I don't mean putting credit on a smart meter per se, but buying e.g. £1000 of energy at today's prices and consuming that energy over the course of 6-12 months?

If one accidently gave an overly estimated meter reading it would have the same effect but I wasn't sure if there was a formal way of purchasing energy in advance of a price rise.

Can anyone confirm whether a smart pre-pay meter allows you to do that if you top it up with £1000?  Does it bill at today's per kw rate or it bills as the rates change?

From what I've read if you are on a prepayment meter if you top up as much as you can before the 31/3/22 then the rates of the electric and gas will stay at pre April prices, only Scottish power have said they will increase the prices on 1/4/22 on prepayment meters, ML has reported them to OFGEM.
If your on a credit meter then inputting a considerably larger reading than the one on the meter, non smart meter, could land the person in court on fraud charges. Smart meters, those that can be read by any provider, will send readings to the supplier so the person shouldn't have any trouble with being billed for days before the 1/4/22 has the smart meter will have the readings to send to the supplier, some SMETS 1 meters, even those capable of being read by any supplier, do occasionally not send readings to the supplier. I wonder if certain suppliers might use the it didn't send us the readings on 31/3/22 excuse to bill users for a few days at the new April tariff to get more money.

Start keeping a reading of your meters usage then you can  complain if they do this and better still if you have photographic evidence of the readings any company doing this to customers could be in serious trouble if they did this.

pochase

QrizB said:

Verdigris said:

Where did you find this figures?

It's a pro-rata figure from the actual offer that those of us who have bought in will receive.

Exactly this.

£1714 will buy you 2900kWh/yr (in an averagely-windy year) so £1000 will get 1700kWh/yr.

The entire wind farm is expected to generate 60GWh/yr at an operational cost of £1.2M, so around 2p/kWh, and to have a 25-year operational life.

Thanks for the tip. Just bought in.

Ectophile

How is buying a few megawatt-hours of energy now any better than signing up to a fixed rate contract for a year or two, and then paying for it as you use it?

QrizB

Ectophile said:

How is buying a few megawatt-hours of energy now any better than signing up to a fixed rate contract for a year or two, and then paying for it as you use it?

I think the OP's logic went, you can buy gas today at 4p/kWh so you'll get 25,000kWh for your £1000. If you buy it next month for 7.5p/kWh you'll only get 13,300kWh.

Verdigris

Because the price is more-or-less fixed for 25 years and your electricity is discounted whatever tariff you are on at the time. You still need to get a "competitive" deal to suit your usage profile. It is a long-term strategy to reduce bills, not a sticking plaster for the crisis we're in now.

ey143

Verdigris said:

A smart meter will change rate on 1/4/2022. You can't give an over-reading on a smart meter because it will send the correct reading diectly to the supplier. You are just risking being prosecuted for fraud.

Some people might get away with advance purchase on older key meters but I suspect suppliers are quite likely to make an estimated reading for 1st April and make adjustments when the key is next topped up where they see people making unusual patterns of payment.

My previous draft comment got deleted when I refreshed by mistake.

Yes I had meant to write "pre-payment meter" not smart meter, I'm aware smart meters will send a reading.  

I remember watching a BBC or ITV news story around the days when VAT was being introduced on energy (late 90s or early 00s?) and some rich bloke with his mansion said he was going to deposit £10k onto his British Gas account to avoid the 5% vat hike at the time.  Apparently it would have worked such that he would have avoided paying VAT somehow after putting the credit on the account.  His theory was that the "return on his £10k energy investment" would yield a higher return than investing in stocks and shares or a cash bond product.

So hence my original question about whether it was possible to ride out some of this if I could pre-pay £1k or £2k......a long shot but thought I'd ask in case there was someone smarter who knew something that I didn't.

ey143

https://www.moneysavingexpert.com/news/2022/03/martin-s-urgent-energy-warning--three-tips-that-might-help-with-/?_ga=2.67079911.812282014.1646732184-1773593238.1645750318&_gl=1*tbz414*_ga*MTc3MzU5MzIzOC4xNjQ1NzUwMzE4*_ga_X74CWQS9F0*MTY0NjczMjE4My4yLjEuMTY0Njc2MjIzNS4w

The above video explains exactly what I was alluding to by way of a prepayment meter and securing the price today by dumping a lot of cash on it......unfortunately many of us, including myself, are not on this meter (and they are generally more costly to use anyway).  

Verdigris

My answer is still, you might get away with it but the supplier is withing their rights to estimate the meater reading on 1st April and charge accordingly.

Small amounts they probably wouldn't bother about but an obvious huge payment would draw attention. Is there any limit to how much you can put on the key (assuming it is a key meter) at one time?

Why are you paying over the odds for pre-payment if you have plenty of money?

Zanderman

ey143 said:

Verdigris said:

A smart meter will change rate on 1/4/2022. You can't give an over-reading on a smart meter because it will send the correct reading diectly to the supplier. You are just risking being prosecuted for fraud.

Some people might get away with advance purchase on older key meters but I suspect suppliers are quite likely to make an estimated reading for 1st April and make adjustments when the key is next topped up where they see people making unusual patterns of payment.

My previous draft comment got deleted when I refreshed by mistake.

Yes I had meant to write "pre-payment meter" not smart meter, I'm aware smart meters will send a reading.  

I remember watching a BBC or ITV news story around the days when VAT was being introduced on energy (late 90s or early 00s?) and some rich bloke with his mansion said he was going to deposit £10k onto his British Gas account to avoid the 5% vat hike at the time.  Apparently it would have worked such that he would have avoided paying VAT somehow after putting the credit on the account.  His theory was that the "return on his £10k energy investment" would yield a higher return than investing in stocks and shares or a cash bond product.

So hence my original question about whether it was possible to ride out some of this if I could pre-pay £1k or £2k......a long shot but thought I'd ask in case there was someone smarter who knew something that I didn't.

The bottom line is that paying upfront by giving a false meter reading is fraud.

And there is no legitimate scheme to pre-pay - and why on earth would energy companies allow you to?  They are having to pay the higher costs, they're hardly likely to let the public buy in advance at lower cost, such a scheme could easily bankrupt them, and several have gone to the wall already. 

MWT

We need to remember that it is 'Pre-Payment' not 'Pre-Purchase', even more clearly described as 'Pay As You Go'.