Are you paying more but using less energy?

Policy and regulation costs typically were 8% of a bill in 2007 and are now 15%, set to become 23% in 2020, according to a breakdown I have seen.
Why tax domestic energy? It is as essential as housing and food and these are not taxed.

Thanks for the figures Malcolm – that’s nearly a tripling of the percentage over a 13 year span, and it’s worse than it appears because these percentages are, of course, levied on bigger real-terms bills and compounded by the fact that less energy is actually being consumed. Perhaps the levies have now reached such a level that it would be politically impossible to transfer them to taxation, but it could produce a more equitable distribution of the burden. At the moment people on benefits are paying high energy bills including charges for somebody else’s solar panel profits; sometimes it might be circular in that they get a Warm Homes Discount paid for out of their own contributions. There are some arguments in favour of taxing energy [to curb waste and incentivise energy conservation] but that could be done through a tiered rate process. Every time we take money out of people’s pockets and wash it through a bureaucratic machine it shrinks and loses value in the process.

Beryl – Over the years, I had to call e.on and their predecessors about refunding credit balances and raising my direct debit when there was obviously no need. When I switched to Scottish Power, a year ago, I asked if they would do the same. The person I spoke to was quite open about the company aiming for customers to build up a credit balance over the summer to help cover winter bills. Here is what is on the SP website:

“You can always request a credit balance refund and we’re happy to arrange this. However, you can often build up a credit balance through the summer months, so we’d recommend leaving this balance on your account to pay for the extra energy you’ll use during winter.

In most circumstances you don’t need to do anything, if you have built up a credit balance we will automatically refund this to you after your annual review.”

I don’t doubt that many would prefer to have a fixed monthly payment but I would be happier to pay energy companies the amount I owe, whenever the meter is read.

I agree with you and since there are already so many fancy tariff structures I don’t see why this option cannot be available for those who want it. The SP method seems to be the same as how E.on do it but it has led to a yo-yo-ing of my direct debit payments over the last eighteen months as they try to get my payments to conform to their profile by the time of the annual review without actually returning any money to me. Their efforts have not been helped by the fact that as a new property there was no historic consumption data [hence it was generously overestimated at the outset], the weather was kinder than usual and meant less gas was used for heating, we took more steps to conserve energy and adjust controls to reduce consumption, and we have been able to spend more time away from home. It’s about as scientific as Bernie the Bolt in “The Golden Shot”.

Being retired, at least we have time to sort out these problems and even write about them, John. 🙂

I have never had any problem in getting e.on (and their predecessor, Powergen) to make a refund or to cancel a proposed increase in direct debit. On a couple of occasions, the person I spoke to said they could not understand why the DD had been increased in view of the credit balance and I was once invited to choose what DD to pay. On the other hand, others have had difficulties in getting refunds on credit balances of many hundreds of pounds, as has been reported on Which? Conversation and elsewhere.

This morning I found a 2009 article on the Guardian website saying that Scottish Power would pay interest on balances in excess of £100 but I’m not aware that this has happened. I believe that Ovo pays 3% on credit balances. That seems like a good investment but I imagine they are good at refunding credit balances.

We will have to carry on working on this, Beryl. I think I’m £169 in credit to SP at present, but they actually reduced my direct debit when I moved to their latest fixed rate tariff. An email about their new T&Cs arrived a few minutes ago. 🙁

Beryl, it is quite true that you will not necessarily get the cheapest deal with a dual fuel tariff. You need to check gas and electricity separately, both with different suppliers and even with the same supplier. I used two separate tariffs for gas and electricity with nPower to get the cheapest deal, and still got a dual fuel discount.

The problem with comparison websites, including Switch with Which?, is that they lead you to a single type of tariff for dual fuels. Once you realise this you need to split your search into separate tariffs. It isn’t difficult – just look at the cheapest option for gas, elec, dual separately and see which gives you the cheapest result. Ensure there are no exit penalties on fixed-term deals – with energy prices falling you may want to change before the term ends.

Sorry – for chesapest read cheapest. Any chance of editing our posts yet, Patrick?

Here’s a link to the article mentioned by Beryl: http://www.theguardian.com/money/2014/sep/23/energy-bills-higher-dual-fuel-deals-new-research

A friend had read something similar, but I had forgotten to look it up.

It’s all so confusing. Please can we campaign for simple unit pricing, like we have for petrol and diesel. Get rid of standing charges, dual fuel discounts and other complications.

Many thanks for the advice Malcolm. I agree it is not that difficult, the key is in the knowing and keeping up with ongoing changes in the Energy Market, the latest being irregularities involving Comparison Websites failing to pass on the cheapest tariffs to consumers. It is the only way to
introduce competition back into a very broken and uncompetitive market system.

Beryl, I have always used Switch with Which? to check tariffs in the belief it gives me all the companies. I hope I am justified in that confidence!
Once you are with a company it is worth checking their latest tariffs. If they have introduced a cheaper one you can change to it more or less instantly – it may only save a few pounds a year but take advantage of it.

Malcolm: SP were offering a cheaper tariff at a saving of about £31 per month, fixed until December 2015 which I enquired about but declined when told (a) it would cancel out any refund of credit surplus and (b) my consumption was too high to be eligible. It would appear there are always strings attached to cheaper deals.

I am awaiting the promised refund within the next 10 days before deciding on the next course of action.

Beryl – You asked me to have a look at SP’s terms & conditions. I did but forgot to post a reply. Sorry about that.

I did not see anything relating to refunds or direct debits that particularly concerned me. I changed to a new fixed price contract and at that time they lowered my direct debit payment and I now have a modest credit balance.

So far I have gone a whole year without having to phone SP to ask for a refund on credit or to reject an increase in direct debit, which is more than I achieved with e.on.

Many thanks Wavechange. I did the sums and decided the loss of my refund worked out more expensive than opting for the fixed rate ‘cheaper’ monthly instalments tariff. My refund if and when it arrives will be worth more than the proposed saving on cheaper monthly payments.

As I am on a fixed rate contract until March 2015, I will probably hold on until then when we should have received the findings of the CMA investigation and will reassess the situation again.

As a matter of interest, have you asked SP if they will make a refund of your extra credit or to decrease your direct debit payment? They will only may a single annual refund following the annual review, as was the case when I was with e.on. I’m hoping that SP will deal with the problem on request since e.on invariably did.

My account has always been in credit which built up over the year. I became suspicious when at the beginning of September [the build up to the heavy usage period] my credit was way above the amount at the same time last year and so decided to query it, which would indicate the need to pursue it or miss out. The weather we can expect this winter will determine whether I request a reduction in monthly instalments I think.

I was not given the either/or option of refund v instalment reduction. The main criterion as far as I see it was the fact that they were gaining interest on the credit surplus at my expense and probably a few thousand others.