NPower gas 'sculpting'

1carminestocky

Currently Active Users: 5190 (1147 members and 4043 guests)

DirectDebacle

1carminestocky wrote: »

I have just posted this.


http://forums.moneysavingexpert.com/showthread.html?p=19451861#post19451861

Get some brains on the job. No offence meggsy, icarminestocky.

meggsy

[FONT=Arial, Helvetica, sans-serif]I received the newsletter 2 days ago, but hadn't read it ... [/FONT]

[FONT=Arial, Helvetica, sans-serif]"Npower gas customer in 2007? You were overcharged & should get the money back. After a change in its tariffs, npower incorrectly charged its gas customers. Now Ofgem, the energy regulator, has ruled it must pay compensation. See the Forum Note: Reclaim Npower Overcharging "[/FONT]



DD I have realised that this whole thread can be saved to your pc, go to the first page, thread tools, and save the print version (as a precaution against the thread being lost)

DirectDebacle

MSE_Archna wrote: »

UPDATE MARCH 09

What's this about?

In April 2008, npower changed the way it bills gas customers and miscalculated. After a long drawn out process Ofgem has now ruled it must pay back the overcharge. If you were one of its customers (apart from those on prepay) at the time, you should be getting a refund.

This thread was originally started way before the Ofgem investigation and you can follow its progress etc.....as per post#1 and weekly email.






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I PMd this to MSE Archna.

MSE ARCHNA, thank you for including your post in the weekly email. Unfortuately it may be causing confusion amongst some readers.

There are two separate but parallel issues with npower running here and they are in danger of becoming entangled in such a way that consumers who may well have a claim are so bewildered that they don't bother.

I will attempt to summarise the claims for you. After you have considered my points perhaps you would consider amending your post.

The first issue is the subject of this thread and was started months before Ofgem were even alerted by Energywatch of a problem.

As you point out this concerns charging more than the contracted 4572kWh Primary Block units per annum under the two tier pricing system.

Npower caused this by changing from charging an equal number of units per month (381) over a year to a seasonally adjusted rate which charges more units in the winter and less in the summer. By making this change half way through a year of flat rate charging to the winter weighting more than the 4572 were charged. The first occasion this happened was on 1st October, 2004, causing an overcharge for the year 1/4/2004-31/3/2005.

They then continued this seasonally adjusted weighting until 30/4/2007. As far as we can tell no overcharging occurred between 1/4/2005-30/4/2007.

On 1/5/2007 the weighting was changed back to a flat rate (381 per month) for the months May-October inclusive. On 1st November seasonal weighting was re-introduced with an even more aggressive winter bias.

For the year 1/4/2007-31/3/2008 consumers could have been charged up to 6535 Primary Block (high rate) units. An excess of 1963kWh at the high price which should have been charged at the low price.

npower have consistently denied this overcharging but have made 'goodwill' payments to persistent claimants. They paid out over £1300.00 to one in order to keep the matter out of the County Court.

Many requests have been sent by contributors on this thread to MSE hoping to have this matter highlighted either in the media shows he does or in a weekly email. Unfortunately this has not happened and the update you have given in the email does not correctly explain the situation.

Moving on to the second issue, that is the Ofgem ruling.

Ofgem have only conducted a limited investigation into the narrow issue of whether npower were obliged to make customers aware of the changes they made on 1st May, 2007. These changes were the alteration to the seasonal weighting of the Primary Block units and at the same time a lowering of the price of the Tier 2 units. This latter change was notified to customers but the alteration to the Primary Block weighting was not. Npower claimed that as a result of these two changes most customers were better off. For this 6 month period (May-Oct) that claim was true. Ofgem ruled that a minority of customers were made worse off and that therefore the regulations required that notification of the changes should have been made to their customers.

In actual fact the Ofgem ruling was not about overcharging at all. It was about whether a change should have been notified to customers as required by the terms and conditions. Ofgem found that because there was no notification some customers would be significantly disadvantaged. If they had been notified of the changes they would have had the opportunity to disagree with them and change suppliers. Ofgem ordered these customers to be re-imbursed by npower. They imposed no fine or sanctions. This is very different to the 'sculpting' issue which you have linked this Ofgem ruling to. In part they are connected but 'sculpting' is much more complicated, involves breaches of contract and possibly £100m or more of customers money wrongfully collected by npower. By linking the Ofgem ruling to this thread will only serve to complicate what for some is already a puzzling state of affairs.

It is this minority estimated at 200,000 that will receive an automatic refund of a few pounds. In the main these customers will be low users of gas, well below the 22000kWh per annum average. The mechanics are that those that use less than 4572 may have been overcharged a small amount, those that use 4572 to 6535 will have been overcharged more and those that use in excess of 6535kWh per annum will have lost out the most. This ruling covers only May-Oct, 2007 (note the years). As can be seen it has not addressed the more serious and wider overcharging caused to the bulk of customers from 1/4/2007-31/3/2008. In short it is not 200000 customers that have been overcharged but the majority (several million).

I hope that MSE can highlight this more widely. As regards the overcharging in the Ofgem decision a thread has been opened to assist those so overcharged or think they might have been. This is to try to keep that issue, which is not contested by npower, separate from this thread which deals with a highly disputed matter. It would be helpful to readers if you amended your post to include the link.

Here is the link.

http://forums.moneysavingexpert.com/showthread.html?p=19397089#post19397089

On the plus side your email has generated an inordinate number of visits to this thread but this thread doesn't contain much information of relevance to the Ofgem decision.

Thank you for your assistance.

Sterling

DirectDebacle wrote: »

Does anyone know about SOL v6? This was posted on the thread I started re the Ofgem decision.


Quote:
All my Bills are: (underscores added to keep the tabulation correct)
From,To,Tier 1 units,Tier 2 units,Tier 1 rate,Tier 2 rate,days covered,tier 1 units per day
02/12/2006 28/02/2007 1780 8375 3.639 2.047 88 20
28/02/2007 21/04/2007 _878 1584 3.639 2.047 52 17
21/04/2007 11/06/2007 _536 _343 3.639 2.047 51 11
11/06/2007 23/08/2007 _315 _876 3.639 2.047 73 4
23/08/2007 30/09/2007 _220 _189 3.639 2.047 38 6
30/09/2007 23/11/2007 1010 _407 3.639 2.047 54 19
23/11/2007 04/01/2008 1202 5616 3.639 2.047 42 29
04/01/2008 22/02/2008 1483 3267 5.024 2.302 49 30
22/02/2008 02/04/2008 _503 5046 5.024 2.302 40 13

I get these figures
Bill No.
1. 1693 Tier 1
2. 871
3. 529
4. 905
5. 479
6. 1057
7. 1202
8. 1438
9. 1710

Sorry for the delay in responding – it’s been that sort of day. I ran the high tier figures in Agrajag’s bills through my spreadsheet. Here is what I found.

I was in exact agreement with DD’s figures for the high tier units on the nine bills, except as follows (my results in brackets); bill 1 (1796); bill 3 (655); bill 9 (503). I have double-checked these spreadsheet results manually, and I get the same figures. Npower’s agree with one or both of us on some bills, but then (as can be seen) differ hugely on others.

DD - you suggested the possibility that the sculpting on this tariff (SOL V6) may be different to the version we know. However, I would be very surprised if that was the case. I say this because I have both sets of the detailed notes from Npower entitled “How to Work out Your Gas Bill”; the first set (undated) issued after the 1st May 2007 and the other set dated 5th November 2007. Nowhere in either document does it indicate that there is any variation in the sculpting percentages for different tariffs. Both documents therefore appear to be universal explanations for tariffs with 2 tier units.

Why then does Npower differ here and there? I rather think problems with their billing system changeovers are the root cause here.

DD - I would like if possible for your figures and mine to be in agreement across all nine of the said bills. I wonder if you would mind double checking your results for bills 1, 3 and 9. If that doesn’t resolve things I will let you have my manual calculations if that will help.

In the meantime, taking Agrajag’s year 03/12/06 to 02/12/07 my spreadsheet indicates that Npower would normally have charged for 6026 high tier units, being 1454 units more than the contractual 4572.

However Agrajag – your bills (apportioned to fit the said year) show that in that year you were only overcharged by 430 high units. The price difference concerned was 1.592 pence, making an overcharge (in my opinion) of £7.19 (incl VAT). Had you been overcharged by the full 1454 units at a price difference of say 4 pence (as many have) the overcharge would have been £61.07 (incl VAT).

Edit – Of course you could select a “year” anywhere within the time you were within Npower, as Cardew has done by looking at say Feb to Feb, and chose the one that gives the biggest payback. However, I am not entirely convinced that this is a legitimate strategy (but many are), and it might get the figure to around £15. However, over the whole period you were with Npower I calculate you would normally have been billed for a total of 8906 high tier units, whereas for some reason you were only charged for 7882. So that puts you ahead of the game already.

In your shoes, and in all the circumstances, I think I would simply file all my Npower paperwork in the loft (don’t throw it away for at least a couple of years – just in case) and forget all about it. Hopefully we will eventually get Ofgem to see sense and order Npower to reimburse all concerned including you.

Finally, as regards the sculpting issue generally, I rather gained the impression from Npower’s various statements that the second sculpting change (in November 07) was on the cards when the first change (in May 07) occurred; both changes being said to be necessary in converting their billing system, and therefore both planned in conjunction. But now I wonder if that was true; because today when I dug out my copies of Npower’s first set of notes mentioned above, I noticed there was no mention of a second change to take place later in the year. It only showed the pre May seasonal weighting percentages and the post May percentages (uniform at 8.333% per month) running until April 2008, with the clear indication that no further change was envisaged even beyond that date. So I wonder

1. Why the second change was made?

2. When was the decision made to make it?

3. What exactly did Npower tell Ofgem about both of these changes?

Something doesn’t quite fit here.

DirectDebacle

Sterling wrote: »

Sorry for the delay in responding – it’s been that sort of day.

DD - I would like if possible for your figures and mine to be in agreement across all nine of the said bills. I wonder if you would mind double checking your results for bills 1, 3 and 9.

As you say it has been that sort of day. I recalculated and came up with your numbers so we are in agreement.

I have some thoughts on your other points but to be honest I am npowered out at the moment. I'll give you my take on it tomorrow.

Cardew

Sterling wrote: »

Edit – Of course you could select a “year” anywhere within the time you were within Npower, as Cardew has done by looking at say Feb to Feb, and chose the one that gives the biggest payback. However, I am not entirely convinced that this is a legitimate strategy

Sterling,
Why would it not be a legitimate strategy?

Npower stated 4,572 per year.

A year is a 12 month period which surely can start on any one of 365 days?

When do you believe a 'year' should start?

In arrajag's case I can't see how Npower's 'defence' that they reduced tier 2 prices applies.

Agrajag

Thanks DD and Sterling for doing such a comprehensive job.
My calculations show that at best I could claim around £25 (If I just claim for the final 12 months, but am fair about when the rate changed). In practice I can see them coming up with something closer to Sterlings £7 ish.
I strongly suspect this will be more hassle than it is worth. In the amount of time this takes to resolve I could proabably do some other MSE type juggling to make more than that...I will takes Sterling's advice and file things away.

I have speculatively written to Npower with the details. I am waiting to see how they reply. If I hear anything I will let you know.

I just wish that companies would do more simple fixed standing charges, especially for people like me who will ALWAYS go over any two tier threshold. I always go for such systems when I can, but they seem to be less and less common. They make calculations much easier, for everyone.

Good luck to any others with more significant claims...

Agrajag

Cardew wrote: »

Sterling,
Why would it not be a legitimate strategy?

Npower stated 4,572 per year.

A year is a 12 month period which surely can start on any one of 365 days?

When do you believe a 'year' should start?

In arrajag's case I can't see how Npower's 'defence' that they reduced tier 2 prices applies.

Cardew I agree that a year should be any valid 12 months. But the suggestion that using the final few months rate difference as the bassis for the whole year seems a bit more suspect. And doing it it a more logical way means the overcharge really isn't that great.
Much as I am loath to let Npower get away with things, I really don't have the energy or the time to pursue it too vigorously. I have written to them, and I will see how that comes out.

Cardew

Agrajag wrote: »

Cardew I agree that a year should be any valid 12 months. But the suggestion that using the final few months rate difference as the bassis for the whole year seems a bit more suspect. .

Agreed, you can only consider the rate difference(s) as they were during the 12 month period you are considering.