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Ask Which? – Will I be overcharged when energy prices go up?

High price for energy and gasoline in a news article headline

Claudia asks: I’ve been on estimated bills for ages and my supplier has just put its prices up. I’m worried that when I next give a meter reading it will charge me loads more at the expensive price…

…even though I used most of the energy when it was at the lower price.

 

Our energy expert James Tallack responds:

That’s a good question, and there are a lot of people in your situation. There are a couple of things you can do to make sure that you’re not overcharged for the energy that you have already used.

Read your meter on the day

If you don’t switch just after a price rise then don’t rely on your supplier to make sure you are only charged the increased prices for the units you use after the price rise takes effect.

Unless you have a smart meter, or your supplier happens to read your meter on the day your prices change, the supplier will have to estimate how many units you used up until the day of the increase.

Estimates can be notoriously inaccurate, so you could find yourself paying for units at the higher rates when they were actually used at the lower rate. The best way to avoid this happening is to contact your supplier by phone or online to provide meter readings the day your prices change.

Query expensive ‘catch-up’ bills

If you’ve been receiving estimated bills from your supplier then you might find that when your meter is finally read that the estimates were too low and there’s been a shortfall between what you’ve been paying and what you owe – known as a “catch-up bill”.

This can be even more problematic if your supplier has changed the prices on your tariff during the period you were receiving estimated bills.

If this has happened to you then make sure you aren’t automatically charged for all the excess units at the new price by ensuring your supplier spreads the excess units across the billing period concerned. If you’re not happy with the explanation you receive, complain.

To reduce the chances of receiving a catch-up bill, provide regular meter readings to your supplier and don’t rely on them reading your meter – by law they only have to do this once every two years.

Don’t pay increased prices or exit fees

And as an added bonus, here’s my top tip on price rises: if your supplier changes its prices, you don’t actually have to pay exit fees if you want to switch.

The rules energy suppliers have to comply with say that if they increase any of the charges set out in a customer’s contact then the customer has a right to get out of that contract. These include the cost of energy, but also cover other types of charges, such as late payment charges or changes to discounts.

As long as you tell your supplier you want to leave by the date the increased prices take effect, and your new supplier contacts your current supplier within 15 working days to tell them you’re switching, you will not have to pay the higher charges.

It’s particularly important to bear this in mind if you’re on a tariff where you have to pay exit fees if you break your contract early – these fees cannot be charged in the event of a price increase. If your supplier tries to charge you an exit fee or says you will have to pay the higher rates until your switch goes through then complain and refer them to Ofgem’s Standard Licence Conditions 23 and 24.

Comments
Profile photo of b martin
Member

The points raised under this heading are an example of yet another instance of how the privatisation legislation and regulations are biased against the consumer and in favour of the power companies. Prior to privatisation meters were read each quarter by meter readers employed by the energy supplier and the need for estimated readings hardly ever arose. The regulations need changing so that meters are read at least once every quarter. The cost of meter reading is minute compared with the cost of the generating stations, fuel and transmission and distribution networks and should be absorbed in the standard overheads of the company.
The only real solution would be to revert to the nationalised system that we had prior to the 1980’s and 1990’s. With the present gaggle of politicians of all parties I cannot see this happening.

Profile photo of keving
Member

It’s ridiculous to suggest we go back to the days of meter readers trudging round the houses once a quarter – there really is no excuse for anyone to go for a year or more on estimated readings, it is generally very straightforward to provide readings, which I do, every month, and it takes me less than a minute. I agree that some additional provision should be made for disadvantaged groups and this may involve assistance with ensuring accurate meter readings, by whatever means.

Member
Derek Bolton says:
22 August 2011

With regard to energy prices in general, I was horrified to hear from Scottish Power when I queried the increase in my standing order that their 19% gas increase was FROM 19% and that my increase was going to be 58% ! They also said that the electricity tariff was increasing by 33% and the economy 7 rate by 5%. Absolutely outrageous. Subsequently I have switched with Which and my annual savings should be about £230 cheaper than my projected increase. It is time that energy companies told the truth when it comes to percentage increases.

Profile photo of cheekymonkeytoo
Member

This may sound a daft question but is there anything to stop a customer providing a higher meter reading now than it currently is – so as to pay more now,but at pre rate increases. Doesnt sound ethical but then again with significant increases in the way before winter it could save a reasonable amount.

Profile photo of wavechange
Member

I don’t know, but you might get a longer sentence for premeditated crime. 🙂