My energy bill ... I don't understand the numbers and £s - Hepl!

Im cynical but IMO what the energy companies do is over estimate your usage so you overpay so they have huge cash reserves of your cash. I wonder how much of what they owe to folk like this can actually be returned when wanted and how much is tied up?

Im cynical but IMO what the energy companies do is over estimate your usage so you overpay so they have huge cash reserves of your cash. I wonder how much of what they owe to folk like this can actually be returned when wanted and how much is tied up?

And is all that dosh protected in the case of an energy firm collapsing?

The OP would be shafted if not.

If you want to keep your payments even then generally you would build up a credit over the summer then eat into it over the winter when usage usually goes up. If you're pretty confident you know what your usage is going to be do you not have the option to lower your direct debit on EON's website or app? But yes, companies seem to over estimate usage and set your direct debit accordingly, I guess it's safer for them if you don't go into a negative balance

And is all that dosh protected in the case of an energy firm collapsing?

with a few hiccoughs the balance is usually moved to the energy company that takes on the customers.

Best to keep the direct debit under control. If you can handle big ‘surprise’ bills then minimise your DD and pay lumps when needed. Otherwise, pitch it at a value that is comfortable for you and will cover your seasonal use.

https://www.moneysavingexpert.com/energy/

Im cynical but IMO what the energy companies do is over estimate your usage so you overpay so they have huge cash reserves of your cash.

Having a smart meter installed soon which I guess will solve the problem as all bills will be exact rather than estimated?

Nah, but you can still adjust your monthly payments downward.

I've knocked £50 a month off my estimated bill from EDF and it seems to be working out OK.

Based on meter readings, gas bill is £55 for 24 Oct to 8 Nov.

– our gas bills in the last few months have been £30-55

£55 for 15 days in the mildest october/novemeber for years.

but yeah, it does seem pretty high direct debits.

Thank kinda makes sense. We tend to have higher bills than typical as Mrs A is a hairdresser with a 'salon' at home, so hot water a necessity.
Will see if we can reduce the dd, would rather save money myself for surprise bills than them doing it!

So that is £110 for 30 days at a time when the weather is quite mild.

Whats your electricity consumption and when was that last billed accurately?

I don't know if they still use it, but E.ON used to have a reasonably good system for estimating annual consumption that would properly take into account the increase in usage over winter on both a personal level and an industry average level. The coldest months of the year are yet to come so It seems right to have a good wedge of cash in reserve to pay for that.

Best option is look at your last year of bills to get your actual annual consumption in kWh and the apply the current prices to that to see what you should be paying. Sometimes the estimates can get skewed by a couple of reads showing more than expected consumption between them which can have a knock on effect on the overall annual estimate.

Regarding the natural cynicism people have about energy companies artificially inflating direct debits. It may happen but almost certainly not in the big companies. The requirements for any system changes are almost always created by business analysts based on what is going to be best for the customers - my experience is these folks care about the product they are responsible for delivering. I have been pretty close to that area for two major suppliers in my career and there has always been a strong desire to get those numbers right - and it works fine for most people most of the time. THere will always be anomalies but there is no grand plan here.

If your eon bill is like our eon next bill that estimated usage cost does not take the government support package into account.

Like tjagain I'm cynical about their motives and methods in building up reserves. However it's safe enough, the industry will bail out when a company goes tits up. And if necessary, the govt. I don't mind them having a bit of credit but a grand is generous - we were the same and have reduced our monthly and also got a partial refund of the balance too I think.

Regarding the natural cynicism people have about energy companies artificially inflating direct debits. It may happen but almost certainly not in the big companies.

This isn’t my experience, every company I have used has tried it on one way or another. With EDF at the moment and they have got us to build up credit over the summer. Their particular trick is only doing a bill every six months so you can’t really track it. And the reduce DD option is hidden behind a massive ‘increase payment’ button. Not much of an issue for the internet savvy but this kind of sh!t makes things hard for vulnerable customers.

scottish power were awful and hard to get money back from.

octopus is really straightforward.

as nixie said, the estimate is likely to be without the Gov subsidy

And two things are different to your past few months; it's soon be winter and depending how that goes weather wise you'll use more. As a rough estimate I use as much in the four colder months as I do in the 8 warmer months. YMMV if your wife's salon uses hot water all year, even then there's a difference heating cold winter water to usable temp compared to heating summer water.

Secondly, price changes - current and foreseen - my supplier Octopus gives me two estimates, one at current rates and one based on their estimate of prices once the cap is removed. The second leaves me cold (literally)

And yes, you can get your DD back but as others have said, then you might miss out on spacing your annual bill roughly equally. But you might have a rather excess balance by the looks of it. Ask for some back but don't spend it (all) - if you've overdone it you can then feed back in as top up.

With EDF at the moment and they have got us to build up credit over the summer. Their particular trick is only doing a bill every six months so you can’t really track it.

Do you have smart meters?

I'm using the EDF website to track my energy use on a daily basis, it shows up a day or two after the day in question.

With edf the Gov subsidy was paid directly into our bank account, rather than being subtracted from the energy bill.

I emailed Shell recently to ask for an explanation of all of the numbers that were on my bill, I had a reasonable handle on it but asked for extra detail, and thought I'd see what they replied with. That reply made less sense than any bill I ever had from any supplier. It was effectively a cut and paste job from various separate sentences, that when combined, actually had no meaning whatsoever. The 'tone' of the response was, to all intents and purposes, "sod off, who do you think you are asking us questions..."
I am only with Shell after being with Pure Planet and am currently looking at switching to EDF as their support was always way better when I was their customer; their app is better and their energy usage info in the app was good. I'll pay the same wherever I am, so I don't see the point of staying with Shell just cos I got put there.

We're massively in credit and I've been logging use at least every month, and SP won't let me bring down my DD. Overpaying by over £100 a month.

In my experience I’d be wary about allowing large balances to build. We were with Bristol Energy, a company that did lots of good things, they got taken over and then this second company went bust just as I was trying to retrieve over £600 from them. They also tried to put the monthly payment up whilst they obviously knew that they were going bust. We got moved to British Gas and have stayed on the standard tariff paying quarterly.
We never got the balance back, every attempt and statement was more confusing than the one before.

We never got the balance back, every attempt and statement was more confusing than the one before.

But was it still applied to your energy account? You just couldn't get it as cash in your bank, or was it lost completely?

our gas bills in the last few months have been £30-55. So how can our annual estimate be £2320 … that’s £190 per month??

That will be for your summer use.
A typical summer month will be ~2% of your total annual consumption, so £2320 sounds about right, considering you'll now have the heating on for the winter.

we pay direct debit as presumed it better value. Can we just ask them now to use the credit up, or ask for it back?

Id be reducing your monthly DD to a maximum of £190 if not less to start to erode your credit balance, and then thinking about a refund, based on that level of credit.

there’s a v similar picture on electricity bills with an annual estimate of £1569, way way more than any recent bill, even accounting for price rise (albeit I haven’t estimated possible hikes next year)

Your electricity usage should be much more equal across months, so your annual estimate should be ~12x your monthly amount (yes you will use more in winter, but its not as much as you'd think)

or is this all a function of eon covering their bases in case of future hikes?

They should be taking a 12th of your estimated annual usage +/- and credit/deficit you have.
Like most other companies they can be a bit slow on reducing your payments.
I check mine on a monthly basis and adjust by DD by +/-£10 to manage that annual balance estimate.
You should be able to do so via your on-line account.

@theotherjonv It was lost completely, I’m still trying but still very confused, £120 was applied to my account but nothing tallied up, overlapped bill periods, money in money out, and so it goes on!

I'm with EDF and they have made two refunds of £66 immediately after the last two direct debits, rather than just adding the cash to their investment account.

The Octopus website is really user friendly. So much that if we return to normal times when prices vary between suppliers I,d pay a premium up to a certain point to stay with them

Easy to amend DD or get balance refund online though there is parameters. You can't clear the whole balance online.
Bills are clear and previous bills are a few clicks away.

Checking today I see our October gas usage was half last year's. Not sure how much of the reduction was due to mild weather and how much due to new boiler and controls. I'll be interested to see the bill for the first cold month this winter.
They do the £66 as a DD reduction. So rather than £170 I'm billed £104 this month.

I do have to laugh at the people spouting the conspiracy theory that energy companies purposely estimate higher usage to keep you in credit to earn money off you. I know for a fact that's total bs because I work for OVO and for a long, long time OVO paid you 3% interest on any credit balance as an incentive. When more people are in credit, historically that meant that OVO could find better deals on wholesale energy so they passed the savings back on. Obviously the current situation has messed all that up but in normal times that was the case.

They would still be offering 3% but Ofgem themselves didn't like it, so they put a stop to it!

If your DD is accurate in the first place you're meant to build up a surplus in summer to pay off the higher usage in the winter. With the current high prices, forecasted usage as a nation and another price rise in January it's no wonder why people's payments are high.

Also, they're only as accurate as the actual readings you give, so if you don't give many real meter readings, be prepared for your estimates to be wrong.

Aus, the only way you can really know if the eon estimates are way off, is going back and compare actual meter readings over 12 months and then do the calculations using your current prices. Even that will just be an idea of what you'll use per annum, because weather changes and people's habits change. Last winter was quite mild, due to current situation people are turning thermostats down / not using the tumble dryer etc etc. However your best marker is previous 12 months actual meter readings. If you're partner has been giving readings then hopefully you can get that info. (Bearing in mind gas units have to be converted).

tetrode - whenever I have had a suggest DD its always built a surplus. DD of twice what is needed. I have no doubt at all its a deliberate ploy. they would not let me reduce it to the amount it should be. So I stopped it.

How much of customers money is being held in this way?

tetrode – whenever I have had a suggest DD its always built a surplus. DD of twice what is needed. I have no doubt at all its a deliberate ploy. they would not let me reduce it to the amount it should be. So I stopped it.

How much of customers money is being held in this way?

I'm telling you straight up it's not a deliberate ploy. Energy is such an immensely regulated industry it would be impossible to do, and an absolute waste at that.

The vast, vast majority of customers have a debt balance not a credit. Count yourself lucky that you're one of the minority.

I have no idea why they wouldn't let you reduce it but I would chalk that down to poor customer service, not some evil hand rubbing conspiracy to earn interest on your credit balance.

Everyone I know has been asked for a DD in excess of what is needed as are many on this thread. Of course its deliberate.

The thing is teej I don't see any of them with ovo....

Perhaps if you chase the best price to the bottom you don't get the best service.

I'm with ovo and can use the app to drop my DD to 5 quid if I wish.

Shell just emailed in the last hour, once again they say based on my dads usage he needs to up his D/D to £490pm (currently £470 in credit). I cannot reduce his D/D to below £430 so I have sacked off the fixed D/D and applied to have him billed on usage alone. Aside from the fact he is 82 and does not have £490 to pay them every month why should he pile up a reserve.

Incidentally, same company supply my fuel I have an £830 credit and I can bring mine down to £220. Makes no sense. Little old man in a bungalow, family in a semi.

That doesn't make any sense to me

First, why has your DD gone down by £31? If it was £293 and the subsidy is £66, shouldn't it now either be: (1) £227, after reduction by the subsidy, or (2) still at £293, with the £66 refunded separately to you

Second, your new credit of £1068 minus your old credit of £792 equals £276 -- that's £10 more than the £266 credit listed

Third, whether it's 266 or 276, where does that come from? It's not your payment minus your gas bill (£262 - £55 = £207). And it's not your payment plus subsidy minus bill (£262 + £66 - £55 = £273)

I can't really get any of that to add up

The thing is teej I don’t see any of them with ovo….

Perhaps if you chase the best price to the bottom you don’t get the best service.

I’m with ovo and can use the app to drop my DD to 5 quid if I wish.

Another happy OVO customer
Takes 2 mins to adjust by DD and keep my balance at a reasonable level.
(unsure if its any amount I wanted though)

I have not chased a price to the bottom. the building up surpluses applies to many different suppliers. maybe OVO don't but sure as heck others do this deliberately

I just submit a reading and pay the bill when they send it (for gas anyway, my leccy is PAYG). I can't afford to have a credit balance with a utility supplier. Some of the numbers floated about on this and other threads just seem bonkers.

Kind of the reverse of the OP's situation but a few years back, my partner moved into a modern housing complex with the electricity meter placed in a cupboard outside which she didn't have access to to take her own readings.

She signed on with EDF with an estimated direct debit which she paid for 3 years without thinking about it. 3 years later she suddenly got a bill for over three thousand pounds, EDF didn't bother coming round to read the meter for three years so when they finaly did, the usage was way more than the DD had covered.

She freaked out, so I did a bit of research. Energy companies can only back-date for one year (If meter reading is their responsibility, not the tennants). Consequently she only had to pay about a grand of the shortfall, saving £2000!

EDIT:

Th he direct answer to the question 'I don't understand my utilities bill is....

You're not supposed to.

I have not chased a price to the bottom. the building up surpluses applies to many different suppliers. maybe OVO don’t but sure as heck others do this deliberately

What alternative metric did you based your choice of supplier on then ?

@ legometeorology - you've summed up my confusion more concisely than I did.

It just lacks transparency ... and bizarrely, they seem entirely reluctant to supply any details on electricity!

And you have to phone to discuss lowering the dd or discuss the bill, but obvs, they're sorry, but they're extremely busy at the moment... (thankfully it's in Mrs A's name, so I can't do that bit of it!!)

I don't begrudge paying whatever we use, but I begrudge being unclear as to how and why.

I yhink utillities bills and how they are constructed could and should come under greater scrutiny, especially with how standing charges etc penalise those who use less energy.

Likewise with water rates. They say you pay for what you use when you have a meter installed, when in fact a good portion of the bill in the form of 'rainwater disposal' is measured against twice rateable band your dwelling falls into.

In my case, living half way up a tower block of 50 flats sat on half an acre of land, it means that half, yes half my bill is for rainwater disppsal!

Meaning that the water company gets £5000 for disposing the rainwater that falls on a patch of land the size of a medium sized suburban house and garden. They must dream of tower blocks, literally money for nothing.

When I bought it up with the a few months ago they stopped chasing me for the small arrears I'd built up. I got the impression there was some ambiguity in how these thing are charged for and it might be a bit of a scam that customers might have legal recourse to.

Like with the meter reading thing I mentioned earlies, these companies charge first and then don't ask questions later, it's up to the customer to be their own ombudsmen.

I think utillities bills and how they are constructed could and should come under greater scrutiny, especially with how standing charges etc penalise those who use less energy.

Likewise with water rates. They say you pay for what you use when you have a meter installed, when in fact a good portion of the bill in the form of 'rainwater disposal' is measured against twice rateable band your dwelling falls into.

In my case, living half way up a tower block of 50 flats sat on half an acre of land, it means that half, yes half my bill is for rainwater disppsal!

Meaning that the water company gets £5000 for disposing the rainwater that falls on ae patch of land the size of a medium sized suburban house and garden. They must dream of tower blocks, literally money for nothing.

When I bought it up with the a few months ago they stopped chasing me for the small arrears I'd built up. I got the impression there was some ambiguity in how these thing are charged for and it might be a bit of a scam that customers might have legal recourse to.

Like with the meter reading thing I mentioned earlies, these companies charge first and then don't ask questions later, it's up to the customer to be their own ombudsmen.

First, why has your DD gone down by £31? If it was £293 and the subsidy is £66, shouldn’t it now either be: (1) £227, after reduction by the subsidy, or (2) still at £293, with the £66 refunded separately to you

Looks like they've taken the opportunity to up his monthly payments at the same time as informing him of the gov scheme . So it appears he is now crediting his account by £332 per month (£266 from his bank + £66 from the gov) rather than £293. The £262 is probably what they wrote and informed him his new monthly payment was going to be, but it's actually £266 they're taking from his account. All seems a bit cheeky really.

Shell recently upped my DD to £186. Oct bill they took £120 payment, as they'd reduced it by the govt contribution. My actual usage was £145. They are also telling me that my expected usage is £205 p/mth. I currently have a £500 credit balance. I can reduce my DD, however, by doing so Shell make you agree to being opted out of their 3 monthly DD 'review', although 'helpfully', they also show you that by doing so you'll have a debit balance by 2024. The only reason I haven't reduced my DD is I expect to finally need the CH, so given the current pricing, I reckon I'll burn ('scuse the pun) through that credit balance quite quickly. I'm also banning the use of the electric oven!!! 😢

Octopus seem to be about right. Set at £170 per month. £500 surplus but big heating months round the corner. Will review in April and see how much the new boiler has balanced the increased cost per unit.