Falling energy bills
The news is full of outrage about rising domestic energy bills. So by way of contrast, I thought I should mention this morning’s letter from my electricity supplier, EDF. From next month they’re making a 32% reduction in my monthly direct debit payments. From above to below what they were last time I blogged on a related subject.
My usage hasn’t changed significantly in all that time.
🙂
FWIW, UK energy charges have been kept artificially low for many years, as policy (and regulators) put cheap supply now ahead of essential investment in future supply, energy security, and cleanup – all areas where we significantly lag much of Europe. All part of The Liar’s feelgood bubble. In general terms, I expect prices should be rising.
Posted on November 26, 2010, in energy. Bookmark the permalink. 4 Comments.
niq's soapbox 
I have a theory that they generally set up the direct debits to be too high so your account gets into surplus. Then if you try to move they refuse to give a cash refund (they did this to a friend) instead offering credit on their systems, thus achieving supplier lock in by the back door. I’m distrustful of them enough that even the 5% direct debit reduction doesn’t tempt me, i pay bills the old fashioned way despite the pain.
I’m with cal on this one – I don’t trust utilities with access to my bank account – once they’ve got your money, it can be hard to get it back. After two disputes with BT (both of which I won after a fight, and each of which could have cost me a three figure sum), I’ve got the scars to prove it!
I buy my gas and electricity from Ebico – a small social enterprise that charges the same to all customers regardless of payment method (especially helpful to those who rely on prepayment meters), and it still offers competitive prices. I like their ethical approach. Indeed I think it was niq who first brought them to my attention.
The previous years energy usage is an OFGEM thing, so all suppliers should be doing it now.
My Gas usage down 30%, which I attribute to a replacement boiler. They forecast a 30% drop from a modern boiler, I was skeptical and apparently wrongly so. The new boiler looks suitably space age.
My electricity usage up 20% which sadly I’m at a loss to explain, although net energy use is down substantially.
I thought the explanation for the relaxed attitude for energy security in gas, was that a lot is piped from the Norwegian gas fields straight into the UK grid, they have huge reserves so as long as we can pay the Norwegians our main supply is pretty secure. Where as a lot of Europe is primarily dependent on supply from, or across, Eastern European countries who have perpetual disputes on the topic.
As someone who works with utility billing software…
I gather you’re making fixed monthly payments, regardless of actual meter reads? It’s usual to set those payments slightly high, for quite understandable reasons. (For values of “slightly” corresponding to “around 10-15%”.) What might be causing – oddness – is what we call the “washup” process, which is what happens when the amount is up for renewal, and they have to reconcile what you’ve used (as metered) with what you’ve paid for.
When we do this (in Australia/New Zealand), there’s a single “washup” transaction, and you get (usually) a refund as a one-off transaction before getting back to billing-as-normal. In your case, it sounds like they’re spreading the washup payments over the next year – which is an odd thing to do, but no doubt they have their reasons – maybe something about the UK industry regulations, I don’t know.
My guess is that in the next year, all things (prices) being equal, your payments will go back up to the tune of about 20%.
As for the vendor lock-in effect – that’s naughty, there’s no way they should be getting away with that. If it happened to me I’d raise a small stink, including complaining to Ofgem and/or the Office of Fair Trading, until I got a cash refund.