Make energy suppliers pay interest on Direct Debit monies in accounts

BikingBud

[Deleted User] said:

MrsStepford said:

We asked for a refund some years ago and EDF told us that if they gave it to us, our bills would go up as they offset the amount against estimated bills. Needless to say, we submit monthly meter readings now.

Complete rubbish I am afraid. We all get a discount for paying by monthly DD. If I recall from my short time with EDF, they have two rates for the same tariff. The PAYGO tariff rates are higher.

You are only charged for the energy used at the agreed tariff price.  If you ask for your credit back then one of the consequences might be an increase in the monthly DD payment which  is NOT an increase in your charges/bill.

Think of it like this. The supplier calculates your annual cost from March to March to be £2400. It sets a monthly DD payment of £200 a month. By the end of September you will have paid £1200 in monthly payments. Your 6 monthly bill in September was £600 leaving a credit of £600.

You ask for the £600 back and it is re-paid. The supplier though is left with an estimate of costs of £1800 to cover the Winter period from September to March so it immediately raises your DD payment to £300 a month.

The above is a simple explanation of why a credit refund can result in an increased DD payment.

But they don't though.

E-On estimate annual cost as £1050 with DD £102 ~ 16% over

Why not pay £880 ~ 16%under?

Rippa

Can someone explain why the dd has to averaged?I don't pay my supermarket an average price for my weekly food delivery so why do energy companies feel that this is the way to do business. In my view I should be paying for exactly what I use each month.I thought this was exactly the point of smart meters.

kaMelo

Rippa said:

Can someone explain why the dd has to averaged?I don't pay my supermarket an average price for my weekly food delivery so why do energy companies feel that this is the way to do business. In my view I should be paying for exactly what I use each month.I thought this was exactly the point of smart meters.

That is an option offered by many suppliers already, to pay for exactly what you've used so no you never have a credit balance on your account. Of course the consequence of this is that your winter bills will be significantly higher than your summer bills.
Some people don't want that variation in bills and would rather pay an average amount over the entire year to help with their budgeting.