Problems with energy bills
Wednesday, 12 August 2009 06:33
Energy bills are notoriously difficult to understand - and challenge - if something goes wrong. But confusion over what you owe and how your supplier works this out can lead to huge bills.
Sarah Routledge identifies some of the most common energy bill problems.
Working out the problem
According to uSwitch.com, energy bills are fiendishly difficult to work out. The comparison site is campaigning for easier-to-read bills, and on showing an example to an examiner, apparently you need a GCSE in maths to understand one.
This effectively means 45 per cent of Britons are unqualified to calculate a household energy bill, a worrying thought.
If you are struggling, uSwitch has compiled a handy guide to reading your energy bill, so you can understand how much you are paying and what you have used.
If your bill this month is unusually high, comparing it against your last bill (or perhaps a friendly neighbour's bill if you have just moved in) could help you understand what's going on. Has your usage changed dramatically? Or has the price gone up? Has your tariff changed?
Once you know the answer, you can take the next step.
Estimated readings
It may be higher than usual because your readings have been based on the supplier's estimate of how much you have been using.
Suppliers are only required to make 'reasonable endeavours' to read your meter once every two years, so most of your bills will be based on their estimate of how much you are using.
The bill should say whether it is an estimate or an actual reading. If it is estimated and you think it is too high, take a reading yourself.
Dr Debbie Mitchell, an analyst living in Southampton, experienced problems when she recently moved into her two-bedroom flat.
"I set up a monthly direct debit with EDF for £40 a month and had only given them an initial meter reading and no follow-up ones. I got my first bill around April time and it was around £200 after the £40 I had been paying each month!
"I saw that this was based on estimated readings which were much higher than the actual readings and when I rang up with the actual readings it turned out I only owed £15!
"I think this is a cunning strategy that energy companies use by totally over-estimating meter readings and then charging people massive bills which they hope they will pay without checking the true meter reading.
"Although they will have to settle the difference at some point, the energy company have been making interest in the meantime. Anyway, in future I'll make sure I provide regular true readings. Other than that I'm happy with EDF."
It is also worth checking the meter serial number which is found on the face of the meter (MPAN for electricity and MPRN for gas) against your bill - inform the supplier if they are incorrect.
If the number does not match up, then the supplier will not be able to use any of the actual readings either that you send or they take - so you will only ever get estimated bills, and you could eventually end up owing a huge amount if these are too low.
But if the meter reading is an actual reading - and it is correct - check to see if your previous bills were estimates. It could be that you have been using more energy than you were being charged for, so you are now catching up.
It is still worth contacting your supplier at this point, as they may be able to put you on a better tariff. If they cannot offer you any significant savings, ask for your average annual energy use - then use this information to search for a cheaper supplier using a comparison site.
According to energy watchdog Ofgem, if you have never switched your gas or electricity supplier, you could save about £100 a year, on average.
They should also be able to offer a payment plan to enable you to pay off the bill in stages, although you will not be able to switch until you have cleared the debt.
You could also look at your energy use and see if you could make any savings. Some electrical appliances such as plasma televisions, tumble driers and even heated towel rails use more power than you might realise.
Back billing
Never received a bill? Or suddenly receive one that is charging for years of underestimations?
Suppliers have to abide by a billing code and there is a rule stating that they can only back charge for 12 months. But there is an important exception to this.
If you have never received a bill, you do need to make efforts to find out who your supplier is, then contact them to start an account. If you do not, then they are within their rights to send you a bill for all your usage - and this could be years later.
This is also true if you are only receiving estimates - you can only be billed for the last 12 months if you have made efforts to give the supplier accurate readings. If not, then you are liable for the entire amount.
Usually you can find out who the supplier is from the previous owner or tenant, but if you are the first into a new build it could prove more difficult.
Patricia Ockenden, a spokesperson for Consumer Focus, said it is worth asking your estate agent, letting agent, developer or building manager first. If they do not know, it is possible to find out yourself.
"There are two numbers: MPAN, the number for electricity, and MPRN, the number for the gas supply. Note down these numbers and the meter reading when you moved in.
"Then call the local distribution company - the numbers are listed on the Consumer Focus website - this has a record of who supplies electricity for every address in the area.
"For your gas supplier, you need to contact the gas transporter, and that is the only organisation who can confirm who the supplier is for your area."
To find out your supplier with any of these companies, call 0870 608 1524.
If they cannot find any details it may be that the supply is via an independent gas transporter (IGT). Ofgem has a list of these that you can see.
It is important to find out who your supplier is as soon as possible, Consumer Focus says.
"The law says you've got to pay for the energy you consume. The meter will be clocking your use even if you haven't made any arrangements," says Ms Ockenden.
However, charges cannot be recovered if the electricity or gas was used more than six years ago, under the Limitations Act 1980, and in Scotland the period is five years.
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