npower dd payments

johnsp72 · 11 October 2017 at 9:12AM

I just wondered if anyone here could explain how npower calculate the monthly dd amounts that they ask for? This is my situation with amounts accurate to the nearest £10ish.
In the last year I used about £1250 of gas and electric combined. I changed to a new cheaper tariff in early September and had a bill in early October.

The new bill has the following information on it;
I'm in credit, about £120.
My estimated usage for the following year is £1310 (I think this high based on previous usage/cheaper tariff but lets use it for now).
My monthly payment is to increase from £100 to £140.

So over the next year I need to give them £1190 (£1310 -120), so roughly £100 so why has my payment changed? They also say they aim to spread payments equally over the year so its not due to the expensive winter months ahead.

I called them regarding this and they could not justify the payment change and despite my explanation (as above) couldn't understand why I was questioning them and repeatedly refused to change the payment back to £100. However I'm stubborn and refused to accept the lack of explanation and after threatening them with the ombudsman and recalling the dd payment they did reset the payment amount as asked.

So the point of my post is twofold really, does anyone understand how they work and as a warning to not let them away with their incompetence.

Neil_Jones · 11 October 2017 at 9:46AM

First of all forget usage in £ signs, they mean nothing, you need the figures in kWh to determine your actual usage and then your tariff prices.

If you spent £1250 last year on bills you must either use somewhere around the norm (16,000kWh for gas and 3,100kWh for electricity) or you're on a expensive tariff.

System · 11 October 2017 at 10:03AM

Let’s keep this simple. You estimate that you will use £960 worth of energy in the coming year. At the 6 month point, it looks like the cost will be closer to £1080. It follows that the difference of £120 has to be recovered over 6 months which equates to a new DD of £80 +£20 or £100 per month. This should give you a zero balance at the end of your contract.

If only it was that simple. From various posts on this forum, it would seem that some suppliers have adopted a rolling 12 months projection. It follows that at the 6 month to end of contract point, a further 6 months on the supplier’s SVT is being added. This results in a much higher DD and a credit balance if you switch at the end of the fixed tariff term. This, to my mind, is a sly way of building up interest free cash flow for the business that most consumers will not argue about.

PS. You are wasting your time going to The EO. I did and failed. The response was that Ofgem has placed an obligation on suppliers to manage consumer debt. How they do this is up to them? Ditch and switch if you are unhappy.

nPower · 11 October 2017 at 10:04AM

johnsp72 wrote: »

I just wondered if anyone here could explain how npower calculate the monthly dd amounts that they ask for? This is my situation with amounts accurate to the nearest £10ish.
In the last year I used about £1250 of gas and electric combined. I changed to a new cheaper tariff in early September and had a bill in early October.

The new bill has the following information on it;
I'm in credit, about £120.
My estimated usage for the following year is £1310 (I think this high based on previous usage/cheaper tariff but lets use it for now).
My monthly payment is to increase from £100 to £140.

So over the next year I need to give them £1190 (£1310 -120), so roughly £100 so why has my payment changed? They also say they aim to spread payments equally over the year so its not due to the expensive winter months ahead.

I called them regarding this and they could not justify the payment change and despite my explanation (as above) couldn't understand why I was questioning them and repeatedly refused to change the payment back to £100. However I'm stubborn and refused to accept the lack of explanation and after threatening them with the ombudsman and recalling the dd payment they did reset the payment amount as asked.

So the point of my post is twofold really, does anyone understand how they work and as a warning to not let them away with their incompetence.

Hi johnsp72,

Thanks for your message. Please contact us using the details on our profile page so we can help with your payment query.

Thanks,

Jen

npower dd payments

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