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Bill Calculation / Profiling

ianmr65
ianmr65 Posts: 596 Forumite
Sorry for the techie question, and opening up a whole new can of worms, but does anyone know anything about this. I think the companies use it when they increase tarrif prices, to calculate what your meter reading(s) would have been if they had taken a reading on the day the tarrif rate changed.

Some hotshot maths guy did a calculation that said utilities were making more money by squewing the profile in their own favour, but as most people, including the companies own employees don't understand how the bills in this scenario are calculated, it's difficult to prove.

Its not a question of taking a simple average, as the usage over a three month period will depend on the weather, and many other factors.

The simple way of avoiding it is of course to submit an online reading, or take a note of the reading on the day that rates change, so you can challenge.

Comments

  • Cardew
    Cardew Posts: 29,048 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Rampant Recycler
    There must be scores of posts over the past 2 or 3 years addressing this issue in MSE if you do a search.

    There have also been plenty of allegations(direct or implied) along the lines of your "hotshot maths guy".(can you give more details of this guy???)

    The estimation of consumption - pre and post price rise date - for the many millions of accounts is(obviously) calculated by a computer.

    Contrary to it being difficult to prove, the algorithim for the computer program is available for checking. It is apparently quite a complicated algorithim that incorporates various sets of data, including average temperatures.

    There have been posts by Utility company employees who explain the role in the Regulator in this scenario; and 2 or 3 years ago there was a post by someone who claimed to write the algorithim(I have no idea if that was true but he obviously knew what he was talking about)

    Salient points are:

    To deliberately write a program to advantage companies(and hence disadvantage customers) would be conspiracy to defraud - pure and simple. There would be as much evidence as needed in the accounts of millions of customers.

    For instance I, like many thousands, note my meter readings at price change dates; but I don't bother to ring in with my this reading unless there was a substantial error in their estimate(to my disadvantage!)

    If there was a pattern of the company's estimates always being in their favour this would certainly be reported and an investigation launched.

    If, say, BG' s algorithim was different to Npower's/E-On's etc etc Why?

    It would be a stupid computer 'nerd' to do do this; and if Management were involved, surely jail would be inevitable as it is an extremely serious criminal offence. In huge companies what chance do you feel they would have of such a policy remaining undiscovered.

    Just another case of a 'Conspiracy Theory' without any substance IMO - but it will doubtless be raised time and time again.
  • ianmr65
    ianmr65 Posts: 596 Forumite
    Cardew wrote: »
    There have also been plenty of allegations(direct or implied) along the lines of your "hotshot maths guy".(can you give more details of this guy???)


    .

    Hi thanks for that i will do some reaserch on here, as you suggest. The guy was quoted, I think, in the Guardian, but i don't have the copy, any more.
  • Terrylw1
    Terrylw1 Posts: 7,038 Forumite
    All these companies have to do is estimate based on your profile and various factors. The factors are pre-Privatisation ones mostly hence they are not new.

    It's also worth noting that some estimation is done by appointed agents and there is far less control in this area. Suppliers are known to be overcharged by these agents and this incorrect profiling is monitored by Elexon in these cases.

    In terms of customer profiling, it's not that difficult. An example of one of the big 6 was that they used to use the last 2 years data held in the system. This was flawed since they even used a previous customers data until they changed it. They then replaced it with estimates where 2 years had not been reached.

    They then changed it to use an Estimated Annual Consumption created based on the current data (which would include billed estimates). Some Suppliers rely more on the Data Collectors EAC/AA values which are well known to be constantly flawed.

    Seasonal factors are included where they are increased/decreased X % based on period. Profile classes are also used and the thresholds for those are set at an industry level, not by Suppliers.

    Gas is more complicated as you also have to include height above sea level and other factors.

    I don't believe for a second that utilities are doing this.

    If you saw how Suppliers billed on the inside, I doubt anyone would think it that complicated. The hot shot IT guys just add the code to the system, the managers set the rest in place.

    PWC (Price Waterhouse Coopers) audit Suppliers annually and they often ask questions such as this.

    Elexon and Ofgem also have the right to call into a Suppliers offices on a flying visit. So, Suppliers would be very unlikely to hold something so dodgy in a place where it can't be changed at a minutes notice.

    Also, they could change the calc and would still have to provide info on how a previous estimation would be calculated. So, they still couldn't avoid the spotlight by changing it if they were found out.
    :rotfl: It's better to live 1 year as a tiger than a lifetime as a worm...but then, whoever heard of a wormskin rug!!!:rotfl:
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