Major change to how OVO calculates Direct Debits

Ildhund

MWT said:
... the supplier will use the standard variable rate to estimate your bills beyond the end of the fixed price period 

Nope, I don't think so. I'm fairly sure* that at the moment the only estimate OVO makes is based on the Future Annual Consumption figure (itself an estimate, of course), the current balance and the current tariff prices, except in the last couple of weeks of a quarter, when the forthcoming new prices will also be used to estimate costs for customers on variable tariffs.

---

*  I've not been in a situation recently where my fixed-price contract ends during the winter, so I can't argue from practical experience. I'll be happy to be proved wrong by someone who does have that sort of experience ...  It's quite possible that the reference date (31 March) will next month be pushed out by a year, so aiming for one month's costs as credit on 31 March 2027. This makes it easier for those currently in debt to pay it off, but it leaves the rest of us with a substantial credit balance over many months. 

Scot_39

jadedfuture said:

Ildhund said:

This appears to be in direct contravention of Ofgem's DD Guidlines which expect the DD to be set at a level designed to bring the balance to zero in 12 months' time. 

Any comments?

"The aim is to make sure you have credit for 1 month’s payment in your OVO account by the end of March. This is to help cover any change in your home energy use over the course of the year. 

Thanks for that, I'm struggling to find anything to suggest this policy has been dictated by something official and not something cooked up by OVO themselves.

OVO implied, when I phoned, that they are just following industry guidlines.

With 4 million customers, based on 12th of the price cap, that's an extra half billion in OVO's back pocket.

Time for a sharp exit...

Welcome to the checks and balance needed to help suppliers cope with now £4.4bn in Ofgem's 91 day arrears and debt repayment plan debt figures.

And who are you going to exit to - when others have the same requirement - like Octopus with their 5 week requirement.

You get £10 plus per month discount at cap tdcv for annualised dd - the loss of interest on a few £100 ave balance pales by comparison (ofgem average CCB has dropped to around £230 last update I read.  4% interest = sub £10  - one months savings.

If folk want to allow people not to pay their bills without swift and meaningful easy action by suppliers to stop them consuming energy - like those insisting prepay metering rules tightened to the point their punitive - to compensate those who were having them fitted even - including having had them stopped for over a year - then you have to accept the consequences of allowing snowballing  debt.

And remember that cashflow adjustment on your credit balance is over and above the now grouped but saddly hidden £50 total in the cap letters going forward df dd tdcv cap for debt measures.

MWT

Ildhund said:

MWT said:
... the supplier will use the standard variable rate to estimate your bills beyond the end of the fixed price period 

Nope, I don't think so. I'm fairly sure* that at the moment the only estimate OVO makes is based on the Future Annual Consumption figure (itself an estimate, of course), the current balance and the current tariff prices, except in the last couple of weeks of a quarter, when the forthcoming new prices will also be used to estimate costs for customers on variable tariffs.

---

*  I've not been in a situation recently where my fixed-price contract ends during the winter, so I can't argue from practical experience. I'll be happy to be proved wrong by someone who does have that sort of experience ...  It's quite possible that the reference date (31 March) will next month be pushed out by a year, so aiming for one month's costs as credit on 31 March 2027. This makes it easier for those currently in debt to pay it off, but it leaves the rest of us with a substantial credit balance over many months. 

The quarterly price cap changes do not affect a customer on a fixed price tariff until the end of the fixed term when they will get used as you have described. 

This is why people get confused when looking at projected 'savings' for a new fixed price tariff to run on from their current one as it will be measured against the SVT not the tariff they are currently on...

Ildhund

MWT said:
This is why people get confused when looking at projected 'savings' for a new fixed price tariff to run on from their current one as it will be measured against the SVT not the tariff they are currently on...

The Future Annual Consumption figure may in some circumstances be based on Elexon's Estimated Annual Consumption (EAC), but for an established customer (with an account and a meter that are both more than a year old), the EAC doesn't come into it. This is what leads to comparison confusion; comparisons are usually initially based on (possibly old cached value of) the EAC, which may or may not be realistic. My own varies considerably between comparison sites. If the EAC is wildly inaccurate, customers should ask their supplier to take steps to remedy it. Good luck to anyone who tries that! 

Swipe

Ildhund said:

MWT said:
This is why people get confused when looking at projected 'savings' for a new fixed price tariff to run on from their current one as it will be measured against the SVT not the tariff they are currently on...

If the EAC is wildly inaccurate, customers should ask their supplier to take steps to remedy it. Good luck to anyone who tries that! 

I can confirm that it was a futile exercise with E.On Next. I have now switched away so will see if it gets fixed over time going forward.