Confusion over nature of Octopus account

pjmendip

In July 2021 I signed up with an Octopus Price Promise July 2021 v1 account for gas and electricity. I was a new Octopus customer. Their supply started on the 7th August 2021.

The contract was I thought a fixed price tariff deal ending on 30th September 2023. This is clearly stated on the contract that they sent me (which states: Tariff Type: Fixed) and that is what I agreed to. What I actually pay will vary with usage of course but my understanding is that the tariffs, ie: the unit charges and standing charges will remain the same until the 30th September 2023 (a date that is again clearly stated on the contract).

I submit monthly readings and get a monthly bill and pay the agreed DD figure based on my original estimates of usage and thus far all has gone well with a small credit being maintained in the account throughout.

I have just had my energy bill for March which is fine and matches my end month meter readings but the predicted costs of energy supply for the coming year has leapt up by around 60% from the 1st of April 2022. This is about what I would have expected had I not been on a fixed tariff but I'm now confused over whether my account is actually a fixed tariff deal or not, despite what is stated on the original contract.

I did wonder if the Octopus billing system is automatically estimating the increased costs as if the 1 April price cap rise is applied to the account even though the account in question happens to be of the fixed tariff type ?

Prior to the latest bill (which arrived just yesterday) I have had not communication from Octopus regarding any changes to the tariff rates on my account although I was of course aware of the major increase in the energy unit costs cap from 1 April. I, perhaps naively, thought that my fixed tariff deal would cushion me until 30th September 2023.

I guess I will have to phone them and query this ASAP but they advise that their phone lines are under huge pressure currently so I thought I would ask here if anyone can shed some light on this.

Thanks in advance if anyone can help

elsien

It’s probably a mistake at their end if you’ve got your original contract - your fixed deal should be cushioning you. 

I’ve only had to call them once recently, and despite the warning about long call waits I did get through to a real person within a few minutes. 

Ultrasonic

I'm afraid a quick Google suggests that is a variable tariff that tracks the price cap but is very slightly cheaper. Check your contract details and discuss with Octopus but unfortunately you're probably not going to get the answer you want. 

pjmendip

Ultrasonic said:

I'm afraid a quick Google suggests that is a variable tariff that tracks the price cap but is very slightly cheaper. Check your contract details and discuss with Octopus but unfortunately you're probably not going to get the answer you want. 

I'm ready for that possibility but I will have to point out that the original contract states quite explicitly that the tariffs under the deal that I agreed to are fixed. If you can have a contract that says fixed and then they say it isn't I wonder what hope any of us have in looking out for our best interests !

Thanks for the replies so far.

MWT

pjmendip said:

Ultrasonic said:

I'm afraid a quick Google suggests that is a variable tariff that tracks the price cap but is very slightly cheaper. Check your contract details and discuss with Octopus but unfortunately you're probably not going to get the answer you want. 

I'm ready for that possibility but I will have to point out that the original contract states quite explicitly that the tariffs under the deal that I agreed to are fixed. If you can have a contract that says fixed and then they say it isn't I wonder what hope any of us have in looking out for our best interests !

Thanks for the replies so far.

It is definitely a cap tracker tariff, so the calculation of the tariff rate is fixed in relation to the cap.

This was made very clear in extreme detail on all of the marketing information on the Octopus website, but the emails that went out after signing up did not make that clear.

The real question is how did you end up on the tariff?

If you saw it promoted on the website then it would have been impossible to miss the tracker nature of the tariff, if you were offered it during a phone call, or you phoned then and asked for it after someone else told you about it then you may have missed reading all the details... 

pjmendip

This is what my contract says (apologies for the longish post):

Your tariff information
About your electricity tariff
Supplier
Octopus Energy Limited
Tariff name
Octopus Price Promise July 2021
V1
Tariff type Fixed
Payment method Direct Debit
Unit rate 18.88p per kWh
Standing charge 24.54p per day (£89.57 per year)
Tariff ends on 30/09/2023
Price guaranteed until 30/09/2023
Exit fees (if you cancel
this tariff before the end
date)
Not applicable
Discounts and additional
charges
Not applicable
Additional products or
services included
Not applicable
Illustrative electricity cost on this tariff
Assumed Annual
Consumption
2,854 kWh
Estimated Annual Cost
See your estimated annual cost
(page 1)
Tariff Comparison Rate (TCR)21.97p per kWh
Supply of electricity is subject to 5% VAT. This is included in the
prices and costs above, and may mean charges are displayed
differently on a statement of account.
About your gas tariff
Supplier
Octopus Energy Limited
Tariff name
Octopus Price Promise July 2021
V1
Tariff type Fixed
Payment method Direct Debit
Unit rate 3.31p per kWh
Standing charge 25.43p per day (£92.82 per year)
Tariff ends on 30/09/2023
Price guaranteed until 30/09/2023
Exit fees (if you cancel
this tariff before the end
date)
Not applicable
Discounts and additional
charges
Not applicable
Additional products or
services included
Not applicable
Illustrative gas cost on this tariff
Assumed Annual
Consumption
20,885 kWh
Estimated Annual Cost
See your estimated annual cost
(page 1)
Tariff Comparison Rate (TCR)4.05p per kWh
Supply of gas is subject to 5% VAT.

The contract also states:

About your tariff

You’ve selected our Octopus Price Promise tariff. This means that your energy bill will reflect the amount of
energy you use each month, but the price you pay per unit is fixed. Like all our tariffs, it is online only.
Once your fixed term is up, we’ll move you to our cheapest standard tariff. This is a rolling tariff (there is no
minimum contract period) and has no exit fees, though you should be aware that this tariff may be either slightly
cheaper or slightly more expensive than your fixed tariff. Rest assured – we’ll be in touch 45 days before your
agreement expires to explain your options.

At the time it seemed fairly explicit to me that this is a fixed tariff account.

Reed_Richards

Hasn't this issue come up before on the forum?

Edit:  Here we are: https://forums.moneysavingexpert.com/discussion/6304465/fixed-price-deal-tariff-being-increased/p1  

Mstty

pjmendip said:

This is what my contract says (apologies for the longish post):

Your tariff information
About your electricity tariff
Supplier
Octopus Energy Limited
Tariff name
Octopus Price Promise July 2021
V1
Tariff type Fixed
Payment method Direct Debit
Unit rate 18.88p per kWh
Standing charge 24.54p per day (£89.57 per year)
Tariff ends on 30/09/2023
Price guaranteed until 30/09/2023
Exit fees (if you cancel
this tariff before the end
date)
Not applicable
Discounts and additional
charges
Not applicable
Additional products or
services included
Not applicable
Illustrative electricity cost on this tariff
Assumed Annual
Consumption
2,854 kWh
Estimated Annual Cost
See your estimated annual cost
(page 1)
Tariff Comparison Rate (TCR)21.97p per kWh
Supply of electricity is subject to 5% VAT. This is included in the
prices and costs above, and may mean charges are displayed
differently on a statement of account.
About your gas tariff
Supplier
Octopus Energy Limited
Tariff name
Octopus Price Promise July 2021
V1
Tariff type Fixed
Payment method Direct Debit
Unit rate 3.31p per kWh
Standing charge 25.43p per day (£92.82 per year)
Tariff ends on 30/09/2023
Price guaranteed until 30/09/2023
Exit fees (if you cancel
this tariff before the end
date)
Not applicable
Discounts and additional
charges
Not applicable
Additional products or
services included
Not applicable
Illustrative gas cost on this tariff
Assumed Annual
Consumption
20,885 kWh
Estimated Annual Cost
See your estimated annual cost
(page 1)
Tariff Comparison Rate (TCR)4.05p per kWh
Supply of gas is subject to 5% VAT.

The contract also states:

About your tariff

You’ve selected our Octopus Price Promise tariff. This means that your energy bill will reflect the amount of
energy you use each month, but the price you pay per unit is fixed. Like all our tariffs, it is online only.
Once your fixed term is up, we’ll move you to our cheapest standard tariff. This is a rolling tariff (there is no
minimum contract period) and has no exit fees, though you should be aware that this tariff may be either slightly
cheaper or slightly more expensive than your fixed tariff. Rest assured – we’ll be in touch 45 days before your
agreement expires to explain your options.

At the time it seemed fairly explicit to me that this is a fixed tariff account.

Based in the above you should be able to open a complaint with Octopus sending them this information which does appear to suggest all the rates are fixed and not linked to the price cap as a tracker tariff.

Wait for their reply and if not happy raise it to the ombudsman but I suspect Octopus may well honour this once you raise the complaint.

MWT

pjmendip said:

At the time it seemed fairly explicit to me that this is a fixed tariff account.

Yes, as I said, the information sent after you agreed to go onto the tariff did not make it clear that you were on a tracker tariff.

All of the published pre-contract information that you could have used to make a decision to select that tariff did make it clear.

Hence the question of how you decided to go onto that tariff?

If for example you were offered that tariff during a phone call to their CS team and they didn't tell you it was a tracker tariff then you have a valid complaint and you should raise this with them.

If you saw the tariff promoted on their website along with the detailed information there that showed it was a tracker tariff then you don't have a valid complaint...

There was some debate here on this last year when most people who had thought it was fixed found out it wasn't, just reach out to Octopus and I'm sure they will sort things out with you if you were unaware of the tracker element due to the way you got onto the tariff...

QrizB

Reed_Richards said:

Hasn't this issue come up before on the forum?
Edit:  Here we are: https://forums.moneysavingexpert.com/discussion/6304465/fixed-price-deal-tariff-being-increased/p1  

Yes, several times. See also:

https://forums.moneysavingexpert.com/discussion/6341820/octopus-energy-fixed-tariff

https://forums.moneysavingexpert.com/discussion/6344633/octopus-energy-telling-me-my-fixed-tariff-is-variable-help

Here's a post from July 2021 where the nature of the tariff was clearly understood at the time:
https://forums.moneysavingexpert.com/discussion/comment/78490721/#Comment_78490721

Price Promise Tariff  Electricity Unit rate: 17.91 p/kWh Standing charge: 23.99 p/day

Gas Unit rate: 3.17 p/kWh Standing charge: 25.43 p/day for completeness

However Price Promise Tariff will rise automatically in October if as expected price cap increases whereas Octopus often delay price increases for existing customers who are on flexible Octopus Tariff

https://octopus.energy/blog/price-promise-formula/

And here:

https://forums.moneysavingexpert.com/discussion/comment/78598798/#Comment_78598798

The Octopus blog post linked to above seems to have gone AWOL, sadly.

pjmendip

Thanks for all the comments and links to other conversations that have occurred on this issue.

Looking back at last summer, I was a new customer for Octopus so I would have phoned them to conclude the deal because I generally find that a good way to assess what a company will be like to deal with. I was previously with EDF with whom, at best, I had mixed communication experiences with. I had run comparisons prior to my call through various comparison sites which highlighted Octopus and this deal as having potential. I did think it was a fixed tariff deal at that time and of course the welcome pack and the terms and conditions that were sent with it seemed to confirm this.

Since the original welcome e.mail and attachments (referred to above) the only communications I have had with Octopus are the monthly bills in response to my meter readings. If my tariff rates were to vary greatly I would have hoped that I would have received a couple of weeks notice of this from Octopus once the energy cap revisions were known. 

I have e.mailed Octopus about this matter and will attempt to phone them when their lines are open next week. I might be prepared to take this to the ombudsman but I will need to see what is involved in doing so.

Thanks again for the input from all