NPower gas 'sculpting'

meggsy

DirectDebacle wrote: »

Thanks for that Meggsy. I saw Mark Todd raise this oin the Parliament channel yesterday afternoon (it didn't clash with Andy Murrays match) and he was fairly scathing re the regulation regulation of the energy with respect to consumer protection. npower and the sculpting issue were singled out as examples of how poorly customers are treated. Shame there were only about 5 other MPs in the House, being Friday afternoon and all.

Hi DD, It took a while to find but here is Mark Todds speech, for anyone interested in reading it just scroll down to 2.34 p.m. Hopefully the other 600 odd MP's will read it as well. Maybe that should read 600+ ?

http://www.publications.parliament.uk/pa/cm/cmtoday/cmdebate/13.htm#hddr_15

I also emailed Mark Todd.

The report is no longer on the above link, but can be downloaded as a pdf.
see from page 667 http://www.publications.parliament.uk/pa/cm200809/cmhansrd/chan105.pdf

Grumpy4u

Well done Meggsy and Mark Todd M.P! I take the liberty of pasting here the last two paragaphs of his speech, which shows us what an excellent job he is doing, and encourage everyone to read all of it..
“So what do I seek from my hon. Friend the Minister? First, I seek clarity on consumer assistance in the marketplace; there should be no more squabbling or turf wars. Secondly, I seek recognition that the market remains complex to most consumers, and that additional specific assistance is required. Thirdly, I seek a far more robust approach to the companies on their customer complaint handling capability. Their current shocking performance will not be corrected by market pressure. Fourthly, clear obligations should be placed on companies to ensure that bills and billing models are clear. Obscurity and complexity are two of the few areas in which the companies seem genuinely to compete; they try to make what they offer customers as difficult to understand as possible. Fifthly, if there are legal constraints on a regulator when it comes to tackling activities such as npower’s price sculpting, let us address them. In the meantime, the investigation by Ofgem should itself be examined. How long did it take? How were data collected? How did consumers and the company have their say? That would be a test of Ofgem’s fitness for purpose in such matters.
Finally, in spite of Ofgem’s qualified all-clear last year, most consumers do not believe the market to be genuinely competitive. Its price movements appear to be like an elephantine dance programme, and the normal triggers prompting quality improvements and sustained price advantages simply do not seem to function. Let us have the Competition Commission examine the market.”
Should we all write to our M.P.s asking that they read the speech in full? How else will we get some action on this problem?
Although I am one of the “lucky” ones who has managed to squeeze some compensation out of npower, I still feel very strongly that the situation must not be allowed to continue.

DirectDebacle

I agree. Now would be a good time to write to M.P's. The summer recess will start soon so they will have plenty of time to deal with constituents matters. They will want to show their constituents that, after the expenses disgrace, they are actually hard working people following a vocation and not riding on a gravy train. They should be asked to write to Ofgem to explain how they conducted their investigation along the lines of Mark Todd's points, Sterling's and mine.

Bear in mind Sterling some time ago, made a detailed complaint to Ofgem in respect of the quality of their investigation and this has been followed up with my own. Since my claim was settled by npower in October last year, from this site alone, they have settled many more and continued to do so after Ofgem 'exonerated' them in February. Why? Ofgem need to be asked this question too. If more people continue to complain either about overcharging or Ofgem's inadequate investigation, or both then some momentum may be given to this issue on the back of Mark Todd's speech.

meggsy

'Which' also have the Mark Todd report ....

http://www.which.co.uk/news/2009/07/npower-shushes-mp-over-constituent-compensation-179656.jsp

This is too good an opportunity to miss so I will email my MP tomorrow
This can also be done via the Which link above.

Cardew

meggsy wrote: »

'Which' also have the Mark Todd report ....

http://www.which.co.uk/news/2009/07/npower-shushes-mp-over-constituent-compensation-179656.jsp

This is too good an opportunity to miss so I will email my MP tomorrow
This can also be done via the Which link above.

It is a pity that Which haven't mentioned Mark Todd's criticism of ofgem's so called investigation.

IMO unless ofgem are made to re-examine this issue, or explain why they allowed npower to redefine the length of a year, npower will have got away with their disgraceful actions for the vast majority of their customers.

It is also both disappointing and inexplicable why Martin and/or his staff have not seen fit to comment on this issue!

DirectDebacle

What we need our M.P.'s to be asking Ofgem about is the tariff year. Without such a concept npower have no defence to the allegation of overcharging.

To recap and putting it simply, customers were led to belive that no more than 4572 high rate units would be charged to their account over a year and that a year would be a 12 month year.

npower claim that a year is their invented tariff year which entitles them to start a new block of 4572 high rate units whenever they make a change to the way they charge for gas or increase their prices.

Ofgem accepted npowers definition of tariff year and concentrated on the period May-October 2007 (a tariff year) as the period to investigate for overcharging.

According to the npower definition of a tariff year from April 2003-March 2007 there should have been 9 tariff years over this 5 calendar year period. That would mean npower were entitled to charge 4572 * 9 tariff years high rate units (41,148) for this period and is quite different to the 4572 * 5 calendar years (22,860) that customers would expect for the same period.

However to confuse the issue even further, npower did not even stick to their own definition and used tariff years of 18 months (1/4/2003-30/10/2004), 24 months (1/10/2004-30/9/2006), 6 months (1/10/2006-30/4/2007), 6 months (1/5/2007-31/10/2007) and 1/11/2007-? to who knows when (either 1/1/2008 or 28/8/2008). The years quoted up to 1/11/2007 were put in a statement and submitted as part of their defence evidence in court proceedings.

npower missed the point that only up to the maximum of 4572 high units can be charged in a year. It doesn't matter whether that is a 24 month, 6 month or however long tariff year or the universally accepted 12 month calendar year. A year is a year.
npower calculated their entitlement of high rate units for the first two tariff years as 18/12*4572 and 24/12*4572. In other words they were using the number of months in a tariff year divided by the number of months in a calendar year (12) and multiplying this by 4572. This would give them the correct number of units entitlement if they were applying the 4572 over calendar years. This amounts much more than they were entitled to charge if they followed their own definition. For example the correct calculation should have been 24/24*4572 for a 24 month tariff year or 7/7*4572 for a 7 month [STRIKE]calendar[/STRIKE] tariff year. This is a deliberately false calculation. They did not apply this calculation to the tariff year 1/10/2006-30/4/2007 which would show an entitlement of 2666 being (7/12*4572). For this period they simply state they were entitled to charge the amount of units per month that the seasonally weighted profile in use permitted. This totalled 3721 high rate units.

Evidently npower are picking and choosing calculation methods that are the most advantageous to them. If the high rate units in a tariff year (or part of) by calculation come to less than the amount that would be charged by simply adding the amount of units charged for each month (according to the weighting profile) then they abandon the formula and go with just totalling each months unit allocation.

As Ofgem accepted the npower tariff year then by definition npower would have been entitled to charge for the tariff year period May 2007-Ocober 2007 a maximum of 4572 high units for that year being (6/6*4572). Therefore as no npower domestic gas customers were billed for anywhere near that amount for that period there could not have been any overcharging.

Ofgem, by completely failing to understand npowers tariff year came to the perverse decision that around 200000 customers who hadn't been overcharged, had been overcharged a small amount. This was to the detriment of the 2 million odd customers who had been overcharged by substantial amounts if Ofgem had accepted that a year was in fact a calendar year and not a tariff year.
The fact that npower admitted to Ofgem that they had never even told customers of the existence of a tariff year, let alone given them a defintion of it or an explanation of how it worked, didn't seem to prevent Ofgem from forming the opinion that the tariff year was an acceptable period of time over which to apply the high rate units.

npower have made Ofgem to look utterly foolish in this matter and this may explain some of the reluctance shown by Ofgem to re-investigate the issues. I hope this opinion is correct. The alternative is that Ofgem really think they have done a thorough and professional investigation and given the industry and particularly npower a nasty shock. If that is the case then us consumers are doomed to an eternity of low service levels and over priced energy products with nowhere else to take our business.

DirectDebacle

Following on from the above it would be interesting if Ofgem could explain this to your M.P.

Ofgem reasoned that, despite a lowering of prices and increase in discounts, some customers were overchrged during the tariff year May-October 2007. This was because npower changed from a seasonally weighted profile to a flat rate for that period, thus causing more high rate units to be charged per month than would have been if the change had not been made.

Exactly the same happened for the tariff year 1/11/2008- 4/1/2008. npower changed the profile back from a flat to a seasonally weighted profile. This caused around 1000 more high rate units to be applied to two tier gas customer accounts than would have been charged had the change not been made. On this occasion there was no compensatory price reduction and raising of discounts. This change would have applied to many more customers than the previous one. Probably all but a very few low users of gas.

It is claimed by npower and accepted by Ofgem that customers were notified of this change. It would be interesting to see the evidence produced by npower to Ofgem to support this claim. It was not in the F.O.I. papers released by Ofgem. I wasn't notified and have seen no evidence of this notification. Notification of their charging methodology was not made by npower until 28/8/2008.

npower and Ofgem cannot have it both ways. If a new tariff year started on 1/5/2007 because of a change to the way they charge for gas (changing the weighting profile triggered it) and finished on 30/10/2007 then the same principle applies to the period 1/11/2007-4/1/2008. A change to the weighting profile triggered a new tariff year commencing 1/11/2007 until the price increase effective from 5/1/2008 triggered the next one which finished on 28/8/2008 due to another price increase. At this point (28/8/2008) npower give what could be considered a proper notification of the pricing and bill calculation methodology.

Inexplicably Ofgem failed to examine this issue, as requested by Energywatch.

Of course none of these convoluted arguments would be necessary if Ofgem had accepted the plain English meaning of a year rather than the bizarre tariff year, that no-one had ever heard of until npower invented it.

I am sure Ofgem have perfectly good reasons for reaching their decision:rolleyes:. They must have been 'accidentally' withheld with all the other 'sensitive' information not released under the F.O.I. exemptions clause they are hiding behind.

sharonann

Was it just during summer of 2007 there was the issue of npower charging to many units at the higher rate, or have there been other times as well. I want to check my bills to see i have been charged the correct amount.

DirectDebacle

sharonann wrote: »

Was it just during summer of 2007 there was the issue of npower charging to many units at the higher rate, or have there been other times as well. I want to check my bills to see i have been charged the correct amount.

Hi,
First this applies to gas only and to those accounts that were on the two tier pricing system.

The dispute is over the 4572kWh per year high rate units. npower cannot charge more than this per annum but by manipulating the length of a year have charged more to many accounts.

To work out if you are a victim you need to decide the year to calculate from. By using the calendar year from 1st April-31st March, provided you used sufficient gas, there was a small but not insignificant overcharge for 1/4/2004/-31/3/2005 and a much larger one for 1/4/2007-31/3/2008. In the case of the latter the charge was at such a rate that the 4572 would have been exceed (depending on usage) by late Dec '07- Jan '08. It is unlikely your bills will be conveniently dated from/to 1st April/31st March so you will need to work them out from these dates. The 'How to Thread', linked at the bottom of this post, explains this.Have a go and if you have trouble come back to this thread and ask for assistance.

Good luck.

sharonann

Thanks for the reply. I did deal with the 2007/2008 overcharge they gave me compensation of £20.00 not a lot I know. I just wondered if there were other dates involved. I dont have my bills back in 2004/2005 to check them, was it quite a small amount out.

How much have people been compensated under the order to do so. I have not had anything apart from the £20 I had back in March 08 time when I complained.

I personally could paper the walls with my npower bills. Errors every time i get a bill. My most recent one this week is once again considerably over estimated to just over £100 worth of gas. I have given them a reading to adjust which I now expect is going to cause dreadful problems again, as they don't seem able to correct anything. I keep thinking I will transfer away but that is a headache as well.