Sainsbury's Energy hiking up my DD again

lilythepink2

I received this email from Sainsbury's Energy on 11 December:
We've just reviewed your account to check whether your monthly payments are set to the right amount.

First of all, let us just say: If you're having difficulty with your payments, whether due to Covid-19 or any other issue, please reply and let me know. Our team is here to help.

Secondly, you should know, based on our latest estimates, you're actually using an average of £62.35 more each month than your monthly payments account for.

This means your account balance is currently £310.44 behind where we'd expect it to be at this time of year.

The simplest way to get your balance back on track is with a one time payment of £310.44 on a credit or debit card, and increasing your monthly Direct Debit to £182.35.

If we don't hear from you, we'll adjust your monthly payments to £208.22, starting with your January payment, which will get your account balance back on track over the next 12 months.

This new amount includes a £62.35 increase to ensure your payments cover your monthly energy consumption and a £25.87 increase to ensure your balance returns to a healthy value of around £174.33 by this time next year.

Just reply to this email if you think we've got something wrong, or if you'll have difficulties making the new payments, and we'll get back to you promptly.

We'll continue to review your account regularly to check your Direct Debit is set to the right amount.

lilythepink2

So I replied as follows:

Dear Sainsbury’s Energy

 I don’t know what method you use to calculate the expected payments from your customers but it is seriously defective. In fact I would go so far as to say that the email below is total rubbish.

 I have calculated (from our bills) the amount of electricity we used in the last 12 months from 8 October 2022. I have taken into account that we had a new smart meter installed in November 2022 and added the two sets of readings together.

 I have then calculated the cost of 12 months’ electricity at current rates:

 

Standing charge 41.671p for 365 days	£  152.10
Night rate 1221.8 kWh @ 12.56p	£  153.48
Day rate 4558.7 kWh @ 34.83p	£1587.80
Total for year	£1893.38

 This works out at a monthly payment of £157.78

I have therefore increased my direct debit to £160 per month.

 Following my direct debit of £120 on 19/12/2023 my account will be £16.18 in deficit which seems to me to be a reasonable balance in the middle of December.

Since I joined Sainsbury’s Energy in October 2021 I have claimed refunds totalling £929.75 which just shows how your company is unreasonably calculating my direct debits. In addition to the refunds I also re-set my DD for three months during which I paid £1 per month!

 I will be keeping a very close eye on the advice offered by Money Saving Expert and will be transferring my account as soon as a good deal with another company is available.

lilythepink2

Their reply:

In regards to the increase in your payments, we are regulated to make sure that you aren't getting into a large amount of debt that you will struggle to pay back. For this reason, when you have a monthly direct debit payment, we run what is called a "payment adequacy" on your account to check your consumption against your payments. If your consumption is over the amount that we have estimated, we will advise you to increase the payments to cover the cost of what you are using.

The Direct Debit adequacy reviews are based on your energy usage over the last 12 months, as well as your current credit or debit balance, and will take this into consideration when calculating your payments over the next 12 months to set the Direct Debit accordingly so you don't fall into a debit balance. We then add a 2 week safety net to carry you through the winter months, when usage is more demanding.

We have adjusted your Direct Debit to £160, which will cover your usage and your debit balance owed

Remember, you benefit from lower prices when you pay by Direct Debit so please don't cancel it.

We will still continue to review your account regularly in the background to ensure your Direct Debit is set to the right amount.

Well, they have accepted my "Direct Debit adequacy review" and not attempted to query it! So just like politicians you never get a straight answer or any admission of getting it wrong.
Also why would I need a two week safety net when I'm paying off my 12 month costs in regular installments?

Robin9

I have asked MSE to move to Energy

Robin9

@LilyThePink

I would suggest you may be on the wrong tariff - your night use is quite low and a standard tariff may be better.
Check your meter to see if the night and day are the right way around.  If you look now what does the meter indicate - R1 or day ?

Slinky

That was my thought entirely, E7 looks like a poor tariff with your usage figures.

bluelad1927

Change to variable DD and pay for what you use each month. As long as you budget for the winter months neither of you can argue what you should or shouldn't be paying

sarah1972

Pmd the team to move from groceries board to energy. 

TheElectricCow

While supplier DD estimates can sometimes end up looking like complete nonsense, it might be worth giving some thought to the comments above regarding your Economy 7 tariff.

With those usage figures you could have saved £200-300 over the year by being on a standard Single Rate tariff rather than sticking with a Dual Rate one and not making use of the off-peak rate.

More to the original point, unless you have any particular attachment to Sainsburys Energy you might prefer a supplier who will let you set your own DD - Octopus for one tend to be quite happy for customers to manage their own DDs without interfering. Variable Direct Debit is another option for most suppliers where you simply pay for the actual amount of energy used each month.

MattMattMattUK

Robin9 said:

@LilyThePink

I would suggest you may be on the wrong tariff - your night use is quite low and a standard tariff may be better.
Check your meter to see if the night and day are the right way around.  If you look now what does the meter indicate - R1 or day ?

Based on a rough calculation and not knowing specifically what region the OP is in, if they were on a standard single rate tariff they would save around £151 a year by moving away from E7, though a colder winter could very easily swing that back in favour of E7. Their day rate usage does also seem to be high for an E7 property, one would generally expect that to be lower. 

QrizB

lilythepink2 said:

Following my direct debit of £120 on 19/12/2023 my account will be £16.18 in deficit which seems to me to be a reasonable balance in the middle of December.

I would expect you to be in credit by about two months payments in the middle of December, which would be £320.

£16.18 in defecit is far too low for someone paying by fixed monthly DD.

I agree with others who say that, taking your day & night consumption figures into account, you shouldn't be on E7.