Stuck on deemed tariff 5x higher than price cap

Ixashe

I have two disabled children and moved into a council adapted property last November.  Their conditions mean that we use a LOT more energy than most other people.

When we moved in the council 'forgot' to send off the change in responsibility forms to the energy supplier so our attempts to transfer provider were refused.  When they finally did send them off, the energy provider said that they were going to put us on their deemed business tariff as they are a commercial only provider which worked out at 14.7p per kwh plus a daily charge of £3.72.  This was backdated to last November, so before the energy cap changes.

I worked out from reading my meter that using the price cap my bill would have been just over £200 for the period, but on their deemed rate it would cost me almost £1300 instead.  When I phoned them their offer of a compromise was to offer a 25% discount, which would still leave a bill of almost £1000 for the period.

I got nowhere with their complaint process so complained to Ofgem, who's final decision is that the company is acting perfectly reasonably because they don't have a license to provide domestic energy so aren't bound by the rules for domestic customers and I should take it up with my Local Authority landlord instead.  My MP doesn't like to do anything which paints the Local Authority in a bad light (same political party) so is trying everything she can to not get involved.

Is there anything else I can do about this?  It seems strange to me that an energy provider can so easily avoid the protections that the energy cap is meant to give to domestic customers.

bagand96

Commercial providers are not bound by the Ofgem rules for domestic supplies. 

It seems strange that your presumably domestic property is being supplied by a commercial supplier, but that might have something to do with the arrangement the council had. 

You should be able to switch to a domestic supplier but I think that will need your existing supplier to act first to get your supply listed as domestic on the industry database. After that you'll need to find a supplier accepting new customers at the Ofgem capped rates. 

[Deleted User]

Ixashe said:

I have two disabled children and moved into a council adapted property last November.  Their conditions mean that we use a LOT more energy than most other people.

When we moved in the council 'forgot' to send off the change in responsibility forms to the energy supplier so our attempts to transfer provider were refused.  When they finally did send them off, the energy provider said that they were going to put us on their deemed business tariff as they are a commercial only provider which worked out at 14.7p per kwh plus a daily charge of £3.72.  This was backdated to last November, so before the energy cap changes.

I worked out from reading my meter that using the price cap my bill would have been just over £200 for the period, but on their deemed rate it would cost me almost £1300 instead.  When I phoned them their offer of a compromise was to offer a 25% discount, which would still leave a bill of almost £1000 for the period.

I got nowhere with their complaint process so complained to Ofgem, who's final decision is that the company is acting perfectly reasonably because they don't have a license to provide domestic energy so aren't bound by the rules for domestic customers and I should take it up with my Local Authority landlord instead.  My MP doesn't like to do anything which paints the Local Authority in a bad light (same political party) so is trying everything she can to not get involved.

Is there anything else I can do about this?  It seems strange to me that an energy provider can so easily avoid the protections that the energy cap is meant to give to domestic customers.

You appear not to be a domestic customer. If there has been a genuine change of use, then the Landlord should have taken action to change the supply from business to domestic use.

That said, how much energy in kWh do you use in a year as there is an upper limit on the amount of energy that can be provided under a domestic energy contract? 

MWT

Ixashe said:

Is there anything else I can do about this?  It seems strange to me that an energy provider can so easily avoid the protections that the energy cap is meant to give to domestic customers.

They are not avoiding protections, they are a business only supplier, they simply cannot put you onto a domestic tariff.

The key question right now is have you managed to get away from them and move to a domestic supplier yet?

If not then pick one which handles both business and domestic accounts and then call them and explain why you need to switch, Octopus is one that can help, and there are of course others.

The root of your problem seems to be the Council's original delay, and that is where you will have to look for any compensation.

Gerry1

Octopus and EDF will take you on at the capped SVT rates but only if you phone them.

Ixashe

The house is a new build, so the council's inhouse build team had it on a commercial contract then forgot to send the paperwork to notify the change from comercial to domestic.  When they did finally submit the paperwork they put the wrong mpan number on so its just this week been kicked out and returned to the original commercial supplier.  I've been told it will be at least 8 weeks for that to sort itself out on the systems before I'm able to submit a new request to transfer to a domestic supplier.  Assuming once that request is able to be submitted it'll take a few weeks to go through, that'll leave me almost 10 months as a domestic customer on a tariff 5x higher than the price cap which I simply can't afford but from what you say it sounds like thats completely within the rules?

MWT

Ixashe said:

... that'll leave me almost 10 months as a domestic customer on a tariff 5x higher than the price cap which I simply can't afford but from what you say it sounds like thats completely within the rules?

In short, yes, the supplier has not created this problem and is not at fault.

The Council have created the problem and have failed to fix it both before and after you moved in, it is the Council that you will need to look to for compensation for the consequences of their mistakes...

This isn't something the Energy Ombudsman can help with.

pochase

Sorry but your numbers don't make sense, especially that your bill would be only £200 for 6 months, while saying at the same time that you use more than average.

01/11/21 to 30/04/22 standing charge @ £3.72 = £669.60. They are charging you £1300 - the £669.60 means that £630.4 is for units used. 

With a unit price of 14.7p this means that you used 4288KWh, which matches the very high use you were referring to.

Split this into 3573KWh for November to March and 715KW for April.

3573KWh * 0.21 (SVT) = £ 750.33
751KWh * 0.28 (SVT) = £ 210.28
150 days * 0.20 Standing charge = £ 30
30 days* 0.45 standing charge = £ 13.5
----------------------------------------------------------
Total £1004.11

So with the discount of 25% on £1300 you have to pay £975 which is better than the £1004 you would have to pay on SVT. Where do you get the  £200 you calculated from? What rate did you use and how many units use did you calculate with?

The rate of 14.7p is excellent, and while the standing charge is of course is extreme, for a very high user during winter you did not lose out.


Also it was you job to send a meter reading to the supplier when you moved in.

Ixashe

pochase said:

Sorry but your numbers don't make sense, especially that your bill would be only £200 for 6 months, while saying at the same time that you use more than average.

01/11/21 to 30/04/22 standing charge @ £3.72 = £669.60. They are charging you £1300 - the £669.60 means that £630.4 is for units used. 

With a unit price of 14.7p this means that you used 4288KWh, which matches the very high use you were referring to.

Split this into 3573KWh for November to March and 715KW for April.

3573KWh * 0.21 (SVT) = £ 750.33
751KWh * 0.28 (SVT) = £ 210.28
150 days * 0.20 Standing charge = £ 30
30 days* 0.45 standing charge = £ 13.5
----------------------------------------------------------
Total £1004.11

So with the discount of 25% on £1300 you have to pay £975 which is better than the £1004 you would have to pay on SVT. Where do you get the  £200 you calculated from? What rate did you use and how many units use did you calculate with?

The rate of 14.7p is excellent, and while the standing charge is of course is extreme, for a very high user during winter you did not lose out.


Also it was you job to send a meter reading to the supplier when you moved in.

The bill would not have been £200/£1300 for 6 months, that was the bill they sent for 2 months once I'd finally received communication from them as I'd been unable to determine who the supplier was after moving in. 

The £200ish figure was calculated by copying the figures they'd used in the bill they sent but simply substituting the price cap figures for the deemed rated they used in their calculations.  The bills they've sending since then have averaged about £850 per month, bear in mind that this is for gas only as the electricity supplier has told me they can't send any bills until they finish their billing cycle.

I don't understand how you can say that the rate of 14.7p is excellent, given that the price cap in application at the time was 4p?

QrizB

Ixashe said:

I don't understand how you can say that the rate of 14.7p is excellent, given that the price cap in application at the time was 4p?

4p was the capped gas tariff; the electricity tariff was 21p. As you've only given rates for one fuel without specifying gas or electricity, and it's common to have electricity without gas but rare to have gas without electricity, pochase has assumed that you are in an electricity-only property.

Ixashe said:

Assuming once that request is able to be submitted it'll take a few weeks to go through, that'll leave me almost 10 months as a domestic customer on a tariff 5x higher than the price cap which I simply can't afford but from what you say it sounds like thats completely within the rules?

The energy supplier has followed the rules.

Your dispute is with the council, not with the energy supplier.

Reed_Richards

Ixashe said:

I don't understand how you can say that the rate of 14.7p is excellent, given that the price cap in application at the time was 4p?

You never mentioned that this was gas hitherto.  14.7p per kWh would have been a good price for electricity!