NPower gas 'sculpting'

System

Had a good long shoutiing match with npower yesterday - £30 for "inconvenience" and "out of pocket expenses" including phone calls.
Use their free no. 0800 55 15 55

Sterling

In effect, Ofgem appears to be saying that its powers are not sufficient to protect the public interest. Surely, if that turns out to be the case, the chief executive of Ofgem should ask the Government for an extension of its powers. What’s the problem?

Furthermore, what type of regulatory organisation is it that takes on the task of an investigation knowing or believing that it does not possess the necessary powers to carry out its duties properly?

However, I find it impossible to believe that Ofgem does not have sufficient powers already (and such a claim by Ofgem should itself be investigated); but if that is indeed the case, the chief executive of Ofgem should hang his head in shame for not having approached the Government for more powers when Energywatch made the original complaint last year instead of letting everyone wait around for months believing it could act, when it now says it couldn’t. As you say, DD, “Maybe it is of such a scale that worries them”.

But although Ofgem has thus far buried its head in the sand - judging from the Times’ article, it looks like pressure is beginning to mount on Ofgem to reconsider its position. Consumer Focus and the Energy Ombudsman seem willing to play their consumer protection rolls correctly, and will no doubt expect Ofgem to think again and do likewise.

Well done DD for acting as the driving force behind this thread (and the Times). I hope in the fullness of time a couple of million Npower gas customers will have cause to thank you. In the meantime, there will be, I’m sure, very many people who will press their claim individually with Npower in the next few months (plus those who have already) as a result of this thread who will also have much to thank you for.

In the meantime of course – the fight goes on.

1carminestocky

No idea of the scale of the operation is/resources are at the Ombudsman but surely if, say, 10,000 npower aggrieved punters were to lodge a complaint with them serious questions would have to be asked of both npower and Ofgem?

In fact, would it actually be better for punters to contact the Ombudsman immediately after receiving the original rebuttal (standard?) letter? Surely that would have the twin effects of causing npower greater financial hardship plus p.rick up the ears of the Ombudsman? Forget Ofgem, they are clearly a Mickey Mouse outfit.

Sterling

DirectDebacle wrote: »

'As I was given no opportunity to either accept or reject these changes then these changes should not have been applied to my account. Therefore all my gas should have been charged at the rate applicable on 31/10/2007.

DD - If I am summarising you correctly, Ofgem confirms that each sculpting change in 2007 [corrected from '2008' typo] operated as a separate price rise, and all affected customers should have received a full explanatory written notice on each occasion. Nothing like this occurred in either case. The first change may have been briefly mentioned (buried) in Npower’s blurb, but without any indication that it constituted a price rise. The second change was made with no notice whatever.

It therefore follows that the price increase on 4th January 2008 is invalid because without the above change-of-sculpting explanatory notice(s) being given with it, customers have not been properly informed (in the opinion of Ofgem), and therefore the unit gas prices must remain at their values as of 31st October 2007 - until this lack of notice is remedied - or until the first properly notified price increase after 31st October 2008 - by which time no more than 4572 high tier units a year are being billed, and by when a standard price increase notice will suffice.

In any event, it seems that Npower failed to give any notice concerning the price increase on 4th Jan 08, and that alone would surely make it invalid, again meaning that the unit gas prices must remain at their previous values until as mentioned above.

There was a price increase on 29th August 2008, and due notice was given, but until 1st November 2008 customers were still paying for more than 4572 units in the previous 12 months. As the notice of the said price increase did not mention this fact, I assume that it is also invalid; in which case affected gas customers should to this very day still only be paying for gas at the rates they were on 31st October 2007, because there has been no valid price rise since then.

Have I got this right?

DirectDebacle

Ofgem confirms that each sculpting change in 2008 operated as a separate price rise, and all affected customers should have received a full explanatory written notice on each occasion.

Have you made a typo and mean 2007?

I haven't interpreted the Ofgem ruling to mean this. I see a price rise as separate to a change to the weighting profile.

The terms and conditions covering this are almost verbatim from the conditions of compliance required when making a unilateral variation to a customers contract, as laid down in the Gas Act.

There are two distinct sub-sections.

a) refers to the increasing of charges or

b) in any other way that is to the significant disadvantage of the customer.

My view of the Ofgem ruling is that they have made a decision upon a notification requirement under b). If you disagree with a change under a) or b), the procedure is the same. In either case you change supplier and the change is not enforced.

Clearly in May 07 there was no price increase, there was a price reduction. Ofgem have found that the change to the weighting was to the significant disadvantage to the customer as at b).
They have not ruled it as a price increase but as a change that should have been notified as required by the Gas Act and the Terms and Conditions of the contract.

In either case a) or b) the conditions state that,'If the Domestic customer notifies the licensee after he becomes aware (by any means) of the variation but no later than 10 Working Days after the date on which he receives Notice, that he is ending the domestic supply contract, the licensee must treat that variation as ineffective and neither enforce nor take advantage of it.

That is the relevant bit.

This is how I applied it to my claim.

1/4/03. Price rise-notified
Introduction of flat rate/seasonal weighting-not notified

1/10/04. Price rise-notified
Change from Flat rate to seasonal weighted-not notified

1/5/07. Price reduction (notification not required)
Change from weighted to flat profile-not notified

1/11/07. Change to weighting profile-not notified

4/1/08. Price rise-notified

My approach was this. All price rises were notified in accordance with the requirements as at a) above. (I received notification of the Jan 08 rise. You didn't? Fair enough.)

The changes to the weighting, with the exception of May07 and November 07, all occured at the same time as a price increase. I would have argued that if I had received the correct notification then I would not have agreed with the changes. I would have had to change supplier and npower would not have been able to 'enforce it nor take advantage of it'.

The same applies to the changes to the weighting profiles in May and Nov. 07 which were made without a price increase.

The number of days notice required by the conditions become irrelevant as npower kept the changes secret. Thus there was no opportunity to accept or disagree with them within the specified time.

In my case the first change I would have objected to was the change on 1/4/2003. It was then that npower broke the contract and continued to be in breach of contract until the time I changed supplier in August 08. Therefore my claim required that npower neither 'enforce it...' etc. In my view all changes, on or after 1/4/2003, were now changes that should not have been applied to my account.

The same argument can be applied to any change that npower made that was not properly notified, whenever you joined.

It may well be a valid argument that if you joined npower on 31st October, 2007 and left on 31st March, 2008, (you have not been charged more than 4572kWh high rate units) but nevertheless require all your gas to be charged at the Oct 31st price as you would not have agreed to the changes made on 1st Nov. 2007. and would have been forced to change supplier.

I am not a lawyer but it is an interesting argument.

DirectDebacle

You could try this hypothetical scenario.

First dates of prices rises:
1/4/03, 1/10/04, 1/1/06, 1/4/06, 1/10/06, 4/1/08.

You join npower 30/5/05. All price rises AND changes to seasonal weighting are correctly notified. You pay no more than 4572 high rate units per annum until you notice the overcharge of these units on your post 4/1/08 bill.

You state that at the time you joined, seasonal weighting was not properly explained to you ( a year is not a year but an npower year, we zero the 4572 etc). If they had been fully explained and shown in the terms and conditions you would not have joined npower. These were hidden terms and conditions which you would not have signed up to. The contract was therefore unlawful and you want all your gas recalculated at 30/5/05 prices and refunding the difference.

I think you would have a good case. It is hypothetical as correct notification was not given. Which gives you an even better case.

DirectDebacle

This is for Cardew only.

I bet in the fullness of time Ofgem (or some other body) judges that npower have been in continuous breach of contract since 1/4/03 to whatever date is deemed that they started to correctly notify customers of changes to the way they charge for gas. Earliest this could be is June/July 2008.

npower are ordered to contact all customers past and present that have been disadvantaged and re-imburse them.

Now, that has to be so much fairer than your usual wager Cardew. Are you on for the usual stake of a pint:beer:

Cardew

DirectDebacle wrote: »

This is for Cardew only.

I bet in the fullness of time Ofgem (or some other body) judges that npower have been in continuous breach of contract since 1/4/03 to whatever date is deemed that they started to correctly notify customers of changes to the way they charge for gas. Earliest this could be is June/July 2008.

npower are ordered to contact all customers past and present that have been disadvantaged and re-imburse them.

Now, that has to be so much fairer than your usual wager Cardew. Are you on for the usual stake of a pint:beer:

Not only am I on for the bet - I will give generous odds of 2/1.

A bet I would love to lose!

Edit.
I have laid off this bet at 13/2!

Sterling

DirectDebacle wrote: »

Have you made a typo and mean 2007?

Yes - it was a typo. Thanks for pointing it out. I have now corrected it to 2007.

Very many thanks indeed for such a full and detailed response. As you can imagine, after seeing the significant difference this argument made to Agrajag’s claim (#995 & #997 - page50), I felt that it should be incorporated into all similar claims against Npower whenever possible, in addition to the claims for excess high tier units over a year; and your reply is an extremely helpful, if not vital, clarification.

Thanks again.

DirectDebacle

Sterling wrote: »

Very many thanks indeed for such a full and detailed response. As you can imagine, after seeing the significant difference this argument made to Agrajag’s claim (#995 & #997 - page50), I felt that it should be incorporated into all similar claims against Npower whenever possible, in addition to the claims for excess high tier units over a year; and your reply is an extremely helpful, if not vital, clarification.

Glad it cleared things up for you. I have been advocating this for a long time with claims but with one important rider.

Agrajags claim illustrates this very well. In his case the recalc. was a big boost to his basic excessive high tier units claim. The reason for this is that the tariff he was on, SOL 6 did not benefit from the price reduction in May. Therefore for the months April to Jan 4th 08 there would be no difference between what he paid and what he should have paid had he not accepted the increased weighting commencing 1/11/07. His high units did not exceed 4572 until February 08.

That is why I re-exaimined his recalc. From Jan 4th his high unit increased dramatically and there was now a price difference to consider. Bizarre as it seems a shorter recalc period (from 1/11/07) was of more benefit than for a whole year.

For many claims doing a re-calc from April 07 - March 08 will not be helpful because the May price reduction to the lower units reduces the overall difference. Each claim will have to be gone into individually to see if it is worth adding this extra element to an excess high unit claim.

To be absolutely sure it is worth considering a recalc, then you need to have joined before 1/10/06. There was a price increase then and prices remained unchanged until the lower tier reduction in May 07. Unless of course you are an Agrajag SOL 6 type victim.

I have come to the conclusion that claim type: Agrajag Sol 6 version 1.1.1007 are best left alone as they complicate the simple Type 1 Excess Units versions 1,2, and 3 and the Type 2 Recalc. version 1.5:D

Got headache. Going bed.