SCOTTISH POWER ASSESSING MONTHLY DIRECT DEBIT BILLS ON ESTIMATED 18 MONTHS ENERGY USE!

NineteenNineteen

Hello, I was expecting my monthly direct debit energy bills to be based on 12 months estimated usage, as I have received emails from Scottish Power stating what my new annual cost will be. However, when I accessed my online account DD manager, it said that because my payment review falls in April 2023, not giving them a sufficient time frame  properly to assess my usage it has to be extended to April 2024. (This is despite the recommended DD changing every time I send in a meter reading and a bill is generated).What they have then done is worked out 18 months energy usage (which includes two winters), deduct my £1,104 credit from the total (nearly £7,000!) and then divide the balance by 18. This of course makes my payments much higher than I was expecting, They originally told me my estimated annual cost was £3,637 (which I accept) and I thought my credit  would come off that. My new monthly payment (£313) is about £100 more than I was expecting.

Can they do this? Is it even legal?

Any thoughts/advice would be much appreciated.

QrizB

Welcome to the forum.

What is your tariff, and how much energy (gas and/or electricity) do you expect to use in a year? How much has SP used for 18 months in their calculation?

dunstonh

Can they do this? Is it even legal?

yes and yes.

If you have the evidence that supports the monthly payment being set lower, you can make your case to them.   i..e take your actual annual usage in units. Multiply that by the unit price and divide it by 12.   If that figure is £313 or thereabouts, they are right.  If that figure is £213 then you are right.

What they have then done is worked out 18 months energy usage (which includes two winters),

It doesn't really include two winters as that goes back to April.  So, the coldest months of winter are not included in there twice.

Alnat1

I read the OP as saying SP had calculated on 18 months from now, which would be winter/summer/winter.

So, it does include 2 winters.

Alnat1

Thinking again, if they only based it on the next 6 months use, until the review date, it would be even higher, as no low usage months would be calculated in to bring the price down.

NineteenNineteen

QrizB said:

Welcome to the forum.

What is your tariff, and how much energy (gas and/or electricity) do you expect to use in a year? How much has SP used for 18 months in their calculation?

Hi, Thanks for your response. I am on their default dual fuel variable tariff. My fixed rate deal ended at the end of August, and I was told by SP that in September my DD, based on my previous 12 months usage, go up from £1,631 to £2,882. I double checked with SP that that would mean my monthly payment would increase to £241 just for the month of September - but that's not including my large credit. I accepted this figure.

With the October increase I estimated that my DD would increase to just over £300 - but again, not taking into account my £1,100 credit. What SP did was to assess the usage estimate over 18 rather than 12 months - to just under £7,000, and then deduct my credit from that. This gives a figure similar to what I was expecting to pay - but one that would be reduced by my credit.

By them assessing my DD over 18 rather than 12 months the effect of me having this credit is wiped out and the payments are much larger than I had originally envisaged. (taking in two winters and autumns but only one summer).

I can't really get my head round this - why not base it on an annual assessed usage figure based on the previous year's actual usage, as usual?

[Deleted User]

You may be confusing direct debits; credit/debit balances and bills for energy use.

For the average Ofgem consumer, £100s worth of energy this time last year will now cost £195 on the EPG tariff. 

To all intents and purposes the EPG is a fixed tariff. What I would do is a re-calculation of my annual cost based on my annual usage in kWh and the new tariff rates. From this, I add/subtract my debit/credit balance to give a revised annual cost. The annual cost is then divided by 12 to give a monthly DD payment.

Clearly, the £400 comes into play and I would expect the payments for October to March to be discounted by £67/66.

Have you actually undertaken this type of analysis to see whether the supplier’s revised payments are justified or are you just reacting to the increase?  Your cost increase from £1631 to £2882 is less than I would expect for someone coming off a fixed tariff set prior to the October 2021 increase. There have been 3 significant energy price increases since August 2021.

Note:  DD payments have nothing to do with energy charges per se. The payments are held on account and energy charges are deducted from the balance accrued.

dunstonh

I can't really get my head round this - why not base it on an annual assessed usage figure based on the previous year's actual usage, as usual?

Tell us what you actual annual usage is.  Not the amount you are paying.  Actual meter readings between two dates that are a year apart.

NineteenNineteen

[Deleted User] said:

You may be confusing direct debits; credit/debit balances and bills for energy use.

For the average Ofgem consumer, £100s worth of energy this time last year will now cost £195 on the EPG tariff. 

To all intents and purposes the EPG is a fixed tariff. What I would do is a re-calculation of my annual cost based on my annual usage in kWh and the new tariff rates. From this, I add/subtract my debit/credit balance to give a revised annual cost. The annual cost is then divided by 12 to give a monthly DD payment.

Clearly, the £400 comes into play and I would expect the payments for October to March to be discounted by £67/66.

Have you actually undertaken this type of analysis to see whether the supplier’s revised payments are justified or are you just reacting to the increase?  Your cost increase from £1631 to £2882 is less than I would expect for someone coming off a fixed tariff set prior to the October 2021 increase. There have been 3 significant energy price increases since August 2021.

Note:  DD payments have nothing to do with energy charges per se. The payments are held on account and energy charges are deducted from the balance accrued.

Hi, I don't think I'm confusing the different elements that make up bills, credit/debits and monthly debits.

 I came off the fixed rate tariff in August 2022, thus going on to the April 2022 increased amount for one month only before the further October increase kicked in. The annual figure of £2,882 for September was given to me by SP in late July based on my previous year's energy usage.

NineteenNineteen

dunstonh said:

I can't really get my head round this - why not base it on an annual assessed usage figure based on the previous year's actual usage, as usual?

Tell us what you actual annual usage is.  Not the amount you are paying.  Actual meter readings between two dates that are a year apart.

A couple of weeks ago SP e-mailed me to say my actual energy usage over the last 12 months was:

 

                 Gas - 22,763 kWh

                  Electricity - 2,971 kWh

 

[Deleted User]

NineteenNineteen said:

dunstonh said:

I can't really get my head round this - why not base it on an annual assessed usage figure based on the previous year's actual usage, as usual?

Tell us what you actual annual usage is.  Not the amount you are paying.  Actual meter readings between two dates that are a year apart.

A couple of weeks ago SP e-mailed me to say my actual energy usage over the last 12 months was:

 

                 Gas - 22,763 kWh

                  Electricity - 2,971 kWh

 

On the typical for electricity then, and 80% over typical for gas.

That would suggest an annual cost somewhere over £3500, roughly matching the numbers that you already said you accept.