Energy how do they justify your DD increase

MikeJXE

I have commented on many posts regarding energy price rises and the mythical price cap etc

I am usually shot down by several well informed members, the main reason being I don't understand 

I am in disagreement with my supplier who refuses to back down

My history

Period 15/01/21 to 30/01/22. is

 Electric 864 kWh and Gas 7945 kWh that is over 380 days, averaged out to 365 = 829 and 6766

Period 1/10/21 to 30/09/22 a full year

Electric 790 kWh Gas 5491 kWh 

At todays prices that equates to £1038 .52 inc vat.  £86.54 a month 

My DD has for some time been £91 and today  I am in credit of £95.90 

I have emailed complaints, wrote to their head office by recorded delivery and spoke to them on the phone to no avail 

Despite my usage now lower compared to the same month in 2021 my supplier has increased my direct debit to £150 from 01/01/23

The reason they gave I would otherwise be in debt by £700 December 2023

They must think I'm stupid. 

How can they justify this increase ? 

How many more customers are in the same boat ? 

Thank You

GrumpyDil

Have you taken account of the next set of increases when the price cap gets reviewed?

That said if your provider let's you why not pay actual usage monthly. 

[Deleted User]

Potentially the January/April price cap changes, potentially they are using more than one year's history and are assuming that lower usage this year is a blip (they have decades of history for some houses), perhaps they are assuming that this winter or next winter will be much colder than last year and you will use more.

What would your January 21 to January 22 usage cost if the unit rate was 30% higher?

EssexHebridean

1) Price increases coming in April at least - plus the ending of the EBSS meaning that next winter will very likely feel a lot pricier for many.
2) last year was a very mild winter indeed - you might do better comparing your winter period with 2018/19 or even 20/21 to get a more accurate view of "usual" winter use.

If you have a buffer or savings that can be used to find a switch to "whole amount monthly" or "variable Direct debit" where - as mentioned by GrumpyDil above you simply get DD'd for the full amount of each month's bill - for others reading though, be warned that if you don't have a financial surplus or a savings buffer then this is not a sensible time of year to make that switch, and it is only for those with a good solid grasp on their household budgets, too. 

If you believe that the price cap is "mythical" however, the forum members who have seemingly disagreed with you previously are probably correct about that - you don't understand. Plenty of information on here about it -  and I have a feeling that other members have also tried to explain it in some detail in replies to you previously. 

DE_612183

If you are being "shot down" on this forum, perhaps you should pose your question elsewhere and see if you get advice that you like?

What was the saying about asking the same question multiple times and expecting a different result?

Penguin_

Mine have said I should reduce our gas & electric DD from £106 to £70 a month.

MikeJXE

[Deleted User] said:

Potentially the January/April price cap changes, potentially they are using more than one year's history and are assuming that lower usage this year is a blip (they have decades of history for some houses), perhaps they are assuming that this winter or next winter will be much colder than last year and you will use more.

What would your January 21 to January 22 usage cost if the unit rate was 30% higher?

Hi, thanks for replies 

I calculated the January increase for me and they made very little difference, as you said in an earlier energy post it will go up for some and down for others, mine is both and evens out.

They might have decades of history but not of me in this flat.

The only history of my usage they have is since September 2022 when I was transferred to them by SSE, They can look back two years if they have access to SSE which I am sure they have but don't want to take any notice. 

My last bill from SSE quoted my annual estimated usage was Electric 790 kWh and Gas 5800 kWh both actual

Why don't they take notice of that ? 

My first contact with OVO  was and I quote

as your account is being set up, we don't currently hold information about your energy usage, instead we've based your personal projection cost on Ofgems Typical domestic consumption values for a medium customer 12,000 kWh and Electricity 2,900 kWh unquote. 

That statement surely blows decades of data out of the water in my case and probable many others too.

Which reinforces my opinion they are trying to get as much out of us as they can. 

As far as assuming winter will be colder they can't even assume I will be here 
 
My January 21 to January 22 would obviously be higher and so would everyone else's because we are trying to cut down now, even so those kWh at todays prices would make my DD £123 and the average between the two would be £107 not £153 what OVO are wanting.

When I spoke to OVO on the phone they said it had to be £153 but after trying to convince them they offered a 10% reduction which I refused. I am a reasonable man, had they been nearer to actual I would have accepted a DD slightly more than I am paying 

When I said I am definitely not paying it she suggested standing order an offer I took up, I cancelled the DD and set up standing order on the same dates. 

Low and behold the bank notified OVO which I expected and my rates will go up which I also expected, neither here or there but I will fight them, they can't walk over everyone 

No SparkyGrad I'm not annoyed or throwing my toys out the pram, it's a moral issue for me. 

EssexHebridean

Right - so in fact they don't actually know what your usage is, and so can only base their calculations on what they estimate you might use. Can they just accept at face value what you are telling them you will use? No - because the vast majority of people out there either think that they use less than they do, or they assume that it will cost less than it will. As your history with your supplier builds up, their estimates should get more accurate. In the meantime your best bet is to approach them with a "I think this is being unreasonable and would like to pay £X please" approach - Martin Lewis has talked about this many times - including on his podcast which might be worth a listen for you. 

Just spotted that you have cancelled your DD - do remember to increase the amount you are setting aside for payments to take account of the fact that you will probably now be paying higher rates, won't you. 

dunstonh

Energy how do they justify your DD increase

Very easily.  They base it on your use or anticipated use or your estimates if you fail to provide them with regular readings.  The frequency of readings can impact on the modelling.  As can the timescale of the actual readings supplied.  Estimated readings can make the modelling less accurate.

I have commented on many posts regarding energy price rises and the mythical price cap etc

The fact you mention a mythical price cap does raise concerns as the price cap is applied to unit price but your wording hints a lack of understanding there (could just be wording)

My DD has for some time been £91 and today  I am in credit of £95.90 

That is low credit for this point in time after a mild Autumn.   Coming out of Autumn, you would expect to see around 3-5 times your monthly payment as the credit.

Despite my usage now lower compared to the same month in 2021 my supplier has increased my direct debit to £150 from 01/01/23

Winter 2022 was very mild.   Autumn 2022 upto last week was very mild.   As we are about to enter Winter, the signs are its going to be colder.   They will not be running their models on the 2021 temperatures but on a longer average.  

How can they justify this increase ? 

The price is based on your predicted usage based on the available data they have and the predicted pricing over the next year.  Costs are going up in January and almost certainly in April and July.

You seem to be basing it on a single set of readings when it was mild at a price that has less than a month left before it goes up.

If you think energy is expensive now, just you wait until the Government stops subsidising it.   A look at the edf pricing sheet showing what it would be without the support will send shivers down your spine.

MikeJXE

EssexHebridean said:

Right - so in fact they don't actually know what your usage is, and so can only base their calculations on what they estimate you might use. Can they just accept at face value what you are telling them you will use? No - because the vast majority of people out there either think that they use less than they do, or they assume that it will cost less than it will. As your history with your supplier builds up, their estimates should get more accurate. In the meantime your best bet is to approach them with a "I think this is being unreasonable and would like to pay £X please" approach - Martin Lewis has talked about this many times - including on his podcast which might be worth a listen for you. 

Just spotted that you have cancelled your DD - do remember to increase the amount you are setting aside for payments to take account of the fact that you will probably now be paying higher rates, won't you. 

They do actually know they have just taken over my account from SSE and don't need to take my word for it so imo they know my history for the last 2 years and I shouldn't be starting from average user 

Yes I understand the implications of cancelling DD and It doesn't bother me in the least, I would willingly pay Whole amount monthly direct debit but they have not offered that,

why would that be ?

Would it be they can see my usage since September and my DD is covering that amount and they would get very little more out of me ? 
. 

EssexHebridean

dunstonh said:

My DD has for some time been £91 and today  I am in credit of £95.90 

That is low credit for this point in time after a mild Autumn.   Coming out of Autumn, you would expect to see around 3-5 times your monthly payment as the credit.

The OP stated that they only recently moved to their current supplier, I believe.