Backbilling query-does it apply? 6 February at 3:00PM in Energy 5 replies 141 views

confusedenergycustomer

Hi

I have been billed by Octopus Energy for a miscalculation in their billing - dating from a period after I was transferred to them from Avro Energy. I supplied them with meter readings when I transferred over and have provided regular readings each month since then. I received a bill in 23rd October 2022 related to a charge from 1st October 2021 - 27th January 2022 of £420. They are saying that the calculation used by them at the time was incorrect and I was incorrectly credited. They have written off £26 from the charge as it is over the year limit but have said that I am liable for the rest of the calculations. As a result, by balance is now in debt and they have adjusted my direct debits upwards.

When I looked at the backbilling rules on OFGEM, it seems to suggest that it is for circumstances such as when estimates have been used. It is unclear to me whether if the company have made a mistake in their billing whether they are entitled  to claim back that amount at this extended period of time if the customer has acted reasonably throughout. They have offered me a small amount of money as compensation due to their mistake but I wondered if anyone with knowledge of backbilling rules would know whether OFGEM would apply the 12 month limit for this case where the customer has acted in good faith and the company has made a mistake and hold the energy supplier liable for their mistake, or whether Octopus energy are right in saying that they are entitled to make any adjustments to a bill in under a year in time 

Thank you

tightauldgit

Backbilling rules only apply to billing for energy used more than 12 months ago, if its less than 12 months its not backbilling. 

Dolor

BackBilling is not always what it seems. If applied, then the charge of £420 might well be written off but you may not be £420 better off. The rationale for BackBilling is the prevention of bill shock: it is not designed to punish suppliers.

If, for example, you had made £400 worth of payments during the write off period then the total benefit to you would be £420 - £400 = £20.

SoLR transfers are complicated. The SoLR has to agree 2 readings with the failed supplier’s administrator. One for the Change of Supply Date and another for the date when it was appointed as the SoLR.  There is an industry-approved process to agree these readings. The fact that you provided readings is only part of the process and suppliers DO NOT have to use the readings that you provided. (Why - because people have been known to lie when giving transfer readings).

https://octopus.energy/blog/handover-meter-readings/

Without knowing your detailed billing circumstances it is impossible to know who is at fault. The Energy Ombudsman will not take on any complaint which involves a failed supplier.

confusedenergycustomer

Dolor said:

BackBilling is not always what it seems. If applied, then the charge of £420 might well be written off but you may not be £420 better off. The rationale for BackBilling is the prevention of bill shock: it is not designed to punish suppliers.

If, for example, you had made £400 worth of payments during the write off period then the total benefit to you would be £420 - £400 = £20.

SoLR transfers are complicated. The SoLR has to agree 2 readings with the failed supplier’s administrator. One for the Change of Supply Date and another for the date when it was appointed as the SoLR.  There is an industry-approved process to agree these readings. The fact that you provided readings is only part of the process and suppliers DO NOT have to use the readings that you provided. (Why - because people have been known to lie when giving transfer readings).

Without knowing your detailed billing circumstances it is impossible to know who is at fault. The Energy Ombudsman will not take on any complaint which involves a failed supplier.

Thank you for your detailed reply. It does not seem that they are disputing the readings from the switchover. It is that they are revisting a credit 11 months later after accepting the readings and then applying a charge for it. It has increased my direct debit by £60 a month. Does this qualify as a bill shock? Are they entitled to do this? 

Dolor

confusedenergycustomer said:

Dolor said:

BackBilling is not always what it seems. If applied, then the charge of £420 might well be written off but you may not be £420 better off. The rationale for BackBilling is the prevention of bill shock: it is not designed to punish suppliers.

If, for example, you had made £400 worth of payments during the write off period then the total benefit to you would be £420 - £400 = £20.

SoLR transfers are complicated. The SoLR has to agree 2 readings with the failed supplier’s administrator. One for the Change of Supply Date and another for the date when it was appointed as the SoLR.  There is an industry-approved process to agree these readings. The fact that you provided readings is only part of the process and suppliers DO NOT have to use the readings that you provided. (Why - because people have been known to lie when giving transfer readings).

Without knowing your detailed billing circumstances it is impossible to know who is at fault. The Energy Ombudsman will not take on any complaint which involves a failed supplier.

Thank you for your detailed reply. It does not seem that they are disputing the readings from the switchover. It is that they are revisting a credit 11 months later after accepting the readings and then applying a charge for it. It has increased my direct debit by £60 a month. Does this qualify as a bill shock? Are they entitled to do this? 

Direct debits are not billed payments. They are payments made on account from which charges for energy used are deducted. They are not relevant to BackBilling. 

If BackBilling was to be applied, it would only cover the period (as of today) from 5 February 2022 backwards. That is, the supplier can make as many changes as it likes to any bills raised in the period from 6 February 2022 to now.

The reading in your final bill from Avro must agree with the opening reading used by Octopus for the SoLR appointment date. If they match, then the units have been used. Any perceived overpayment to Octopus will be balanced by a reduced payment to Avro. The problem with failed suppliers is that company failure is often associated with poorly maintained customer accounts, and the SoLR has to deal with administrators who are not subject to energy industry rules. 

Switching readings are easier to agree if the consumer has been providing regular (at least monthly) meter readings.

MWT

confusedenergycustomer said:

I received a bill in 23rd October 2022 related to a charge from 1st October 2021 - 27th January 2022 of £420. They are saying that the calculation used by them at the time was incorrect and I was incorrectly credited. They have written off £26 from the charge as it is over the year limit but have said that I am liable for the rest of the calculations. As a result, by balance is now in debt and they have adjusted my direct debits upwards.

Generally, the back-billing rules do not offer any protection for incorrect credits, only for additional billing of previously un-billed energy.

So if they have merely reversed a credit you were not entitled to the back-billing rules do not come into play at all.