Check your electricity tariff to see if you’re being overcharged

by Mars
Solar PV

As air source heat pump owners, the running costs of our central heating system are based on the price of electricity. For us, the sweet spot as a tariff is 15p/kWh to make it cheaper to run than kerosene which typically averages around 50p per litre.

Last year at this time we were paying 11p/kWh of electricity which made our heat pump very affordable to run. In February, we started to notice that electricity tariffs were slowly edging up, and I posted an article expressing our fears surrounding running costs if electricity tariffs pushed up 17p/kWh. Little did I know back then that 10 months later the UK would be plunged into an energy crisis with tariffs exceeding 20p/kWh.

Our supplier (Symbio) was one of many that went bust this autumn and winter and our account was transferred to E.ON Next. We received several emails from E.ON updating us on the progress of shifting our account, and the very first email we received informed us that we would be placed on their default Next Flex tariff at 23.17p/kWh with a standing charge of 28.04p per day.

In the very same email they wrote, “If you set up a Direct Debit, you’ll benefit from lower prices than shown here.” We waited for a few more weeks before we could create an account on the portal, and set up our direct debit as suggested. We then received another email, “Remember: you’ll benefit from lower prices if you pay by Direct Debit, and it’s quick and easy to set up in your online account.”

We patiently waited for the transfer process to run its course and we signed into the portal. The direct debit had been successfully set up, our balance from the previous provider had been carried over, but our tariff remained unchanged. It was still 23.17p/kWh with a standing charge of 28.04p per day.

We sent an email to their complaint’s department and didn’t hear back from them, so we called the call centre. After being kept in a queue for an eternity, we finally got through to an agent.

I explained to them our tariff hadn’t changed when we switched over to direct debit and, as suspected, I could sense an uneasiness from the agent who hit me with a barrage of scripted questions. How did you apply for the direct debit? When did you apply? Did you eat before applying for the direct debit?

Five minutes later, the agent told me that the issue occurred because we applied for our direct debit online via the portal and the system isn’t automated to deduct and adjust the tariff accordingly. So much for “it’s quick and easy to set up in your online account.”

Online systems are built to automate processes like this and the fact that our tariff wasn’t automated to reduce after the system clicked over to direct debit is ridiculous and it is clearly setup in this manner to overcharge people that are not paying attention to their tariffs and rates.

A couple of keystrokes later, our rate was reduced and reflected immediately on the portal. The standing charge is now in line with the direct debit, variable tariff cap. The tariff, however, is still 1p over by our reckoning.

When I questioned this, the agent said that’s the lowest rate they can offer. We sent another email of complaint, and have received a reply that the tariff is correct, which we still dispute. We’ll see if we get an answer in the days ahead.

To check what your cap amount is for where you live (this is valid from October 2021 to April 2022) please refer to this link then compare it to what you’re being charged by your provider.

The obvious issue here is that E.ON might be relying on homeowners to not notice that tariffs are not amended automatically, and it’s an easy way to make some extra money at a time when electricity providers are stretched. But there are rules and regulations in place, and it’s going to be a very tough winter financially for many households in the UK, especially for those that are running heat pumps to heat their properties, so every little saving will help.

If you’ve been switched recently, make sure that the tariff that you’re on does not exceed the cap. While this article is primarily about electricity tariffs and the potential impact on heat pump owners, the same will apply to your gas tariff, so please double and triple check this, because it could save you money this winter.

10 comments

Mark Crooks 24 December 2021 - 09:52

Thanks for this Mars. I was transferred to British Gas from Neon Reef. Despite all the emails telling me not to cancel the DD as British Gas would transfer it over, this never happened and I was put on a cash payment basis account. And I wouldn’t have noticed if I hadn’t read your post.

Using your link I can see the price cap for Direct Debit payment in Yorkshire is 19.12p per kWh, 1p less than the cash basis alternative. I’m looking at using 14500kWh this year. Although 1p difference seems insignificant, that equates to a saving of £145.

Reply
Mars 24 December 2021 - 10:45

I’m very pleased this helped trigger you. I’m tired of the big energy companies cashing in on households.

Reply
Mark Crooks 24 December 2021 - 10:22

Just spoke to someone at British Gas and they said the tariff will not change from 20.07p despite the DD being set up.
?

Reply
Mars 24 December 2021 - 10:44

That’s not right Mark. I would lodge a formal complaint. If it’s not remedied in 8 weeks, I’d suggest lodging a formal compliant with the ombudsman – UtilitiesADR

Reply
Aristotel 24 December 2021 - 14:15

Hi Mars, also ex Symbio now E.ON Next. Intro email said 28.33/21.40 and that it would be lower when signing up to direct debit, which I had signed up for. Just checked what rate they are actually charging and it is 23.77/20.32. According to the price cap calculator linked above, it should be 23.8986/196113 which works cheaper for an ASHP user as myself. I have two questions:

1) How is the price cap enforced.. as separate day & unit rates or as a mix of the both? In other words does E.ON Next have to match those two values exactly or some more abstract figure (average household annual bill etc)? and

2) The price cap calculator link above.. who puts that together? The link is just to the webapp without context on what sources of values it uses. I guess I am want to know more about it before arguing with my supplier about whose numbers are right.

Thanks!

Reply
Mars 24 December 2021 - 14:31

Thanks for the feedback Aristotel. As far as I know the only tariff that the cap is applicable is the default, variable tariff. E.ON must adhere the cap prices and not be over them in any way. As far as enforcement is concerned, you have to lodge a complaint then given them 8 weeks to comply. If they don’t, you have the option of lodging a complaint with the ombudsman (UtilitiesADR), but you can only do that 8 weeks after lodging a formal complaint with the provider.

I don’t know what the source of the link is – I’ll find out.

Reply
Aristotel 24 December 2021 - 14:41

Hi Mars. I meant, does the price cap on variables tariff apply to both the standing rate charge and unit rate *together as one*, or are providers free to have say a higher unit rate and lower standing charge than what is suggested on the calculator (linked), provided they meet the cap in terms of “total bill an average household would use”? In other words, E.ON Next are charging 23.77/20.32 but the calculator suggests the cap should be 23.8986/19.6113.. is E.ON Next required to match both those numbers exactly?

Thanks again and you two keep up the good work on the site and channel!

Reply
Mars 24 December 2021 - 14:44

Aristotel, we’re still trying to figure this all out, but yes, to my knowledge, they should match the numbers exactly. We have got some experts that we can ask about this, but with it being Christmas, it may take a while to get an answer.

Reply
Mars 24 December 2021 - 16:19 Reply
Aristotel 26 December 2021 - 13:30

Hi Mars. Thanks for that link, very interesting but this opens up more questions :as I am seeing mismatching figures between the PDF and the Webapp. Will share my thoughts below in case there is an issue with our figures before we chase with the provider.

On the app, stating Midlands as location and 3100kWh (used this value as this is what the PDF uses as reference) of electricity on DD says: £729.94 total for electricity, with a standing charge rate of 23.8986 and a kWh rate of 19.6113.

But.. looking at the PDF (page 3) for the same 3100KwH across a year, it suggests a max annual standing charge of £87.23 and usage of £695.18 which would make the total £782.41 (not 729.94). Dividing the annual standing charge by number of days in the year does result in 23.8986 a day.. so this matches the webapp number. However the kWh number between the PDF and the webapp doesn’t match.

So either we take the webapp numbers with caution, or (likely) my calculations are off somewhere. What do you think?

Thanks!

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