When is a fixed price NOT?

KlausB

I am on a fixed price contract until October next year, but SO Energy insists that I still have to pay a debit balance. This what they say:

"Regarding a fixed contract, this means that your unit rate and standing charge are fixed but the more energy you use, the more you will need to pay. I can confirm your unit rates have not changed since you joined us, but you have been using more energy than the amount we had estimated you would use.

for example, your unit rate for electricity is 26.12 p/KWh, however, if you were to use 100 units of electricity costing 26.12 P each, in a month this would not cost the same as if you had used 1000 units costing 26.12 each.

We do set a monthly direct debit which is set to help customers budget throughout the year, however, customers do need to try and not use more energy than what they are paying for or they would fall into debit as you have.

I hope that clearly explains how a fixed contract works."

So what is the point of a fixed price? Are they right?

Mstty

If you use more energy than the estimated figures set out on the fixed contract and the DD then yes when you use more energy you have to pay for it.

[Deleted User]

They are absolutely right. There is considerable confusion over the term ‘fixed’. Fixed in the context of an energy contract means the contract term; the unit price, and the daily standing charge. Your monthly DD payment will be based on an estimated amount of energy usage: use more then you will end up with an increase in your monthly DD payment.

In sum, fixed energy contracts are NOT all you can consume for a given monthly price.

TadleyBaggie

It's a fixed TARIFF not a fixed PRICE.

JGB1955

The point of a fixed price is that you know exactly how much per unit of energy plus daily standing charges you will be paying for the length of the contract.  Your monthly payment is merely a contribution to your annual bill.  The more energy you use, the higher your annual bill will be.  Your monthly direct debit is not an 'all you can eat' type of payment.

FreeBear

Dolor said: In sum, fixed energy contracts are NOT all you can consume for a given monthly price.

Like filling up your car with petrol. You see a sign saying £1.62 (per litre), so you fill up. Depending on how much you put in the tank, you'll pay £20, £50, or £90. The unit price is fixed, but not how much you can take.

jimjames

KlausB said:

I am on a fixed price contract until October next year, but SO Energy insists that I still have to pay a debit balance. This what they say:

So what is the point of a fixed price? Are they right?

Did you think you could use as much energy as you want for the one price? As above it's no difference to the price for petrol, you know the rate per unit of gas/electric (or per litre of petrol) and can choose how much you want to use at that price. It's just that it's less visible for gas/electric unless you read your meter regularly.

So they are right and you will have to pay for what you have used.

pochase

KlausB said:

So what is the point of a fixed price? Are they right?

You don't have a fixed price, you have a fixed tariff, that is price per KWh of energy. There is no all you can eat for energy.

The point is that without the fixed tariff, your direct debit would not only increase for using more energy, but in addition also for the higher rates valid from tomorrow.

gefnew

I think a lot of people see it as a Chinese all you can eat buffet for a fixed price.

KlausB

Thanks Guys. So basically a 'fixed price' is just your average British con.

GingerTim

KlausB said:

Thanks Guys. So basically a 'fixed price' is just your average British con.

Not a con, there's a fixed price per unit, as has always been the case with fixed tariffs. SO's email in your first post is pretty clear.