Electric bill (UK)- help with basics.

[Zoot]

Hi chaps,

embarrassed to ask on my hifi forums, if I could ask on here instead: I think it would be friendlier tbh!

Ok I don't understand the basics of an electricity bill. I have an elderly (97) bedbound friend, lives alone (carers drop in), whom I try my hardest to help in any way: electric bills though, & well I've never understood them (I just pay DD, basically, so I don't need to look).

The thing I find impossible to understand, is that I have an "account "balance". With my BT phone bill I pay for my useage- I'm never informed that I have an "account balance": so why do I for my electric Co?

Secondly, is that this figure seems to vary, not by a little, but varies wildly.

Thirdly are the two finance words ascociated/ always used: "debit" & "credit". These words do not compute with me.

Fourth: is whether this figure, if in debit, means that I'm liable at that point intime, to owe the electricity Co this sum.

Fifth: is this estimated & actual readings. Why there's two: I mean if I use something, water for eg, it isn't complicated by having an "account figure", nor further complicated by having two avenue methods of useage. If I use a gallon of water... I'm billed for it. I use 2 gallons next month... I'm billed for it. Why this massively complicated totally different electricity situation?? Their both utilities Co's after all.

Lastly Sixth: is why when I do enter a meter reading (online), which I do almost always, am I billed the -same- figure each month?? A same figure, would imply to me, that a similar ammount of useage is being denoted that I have used. And that in turn, implies an estimation. Are my numbers I type in, being acknowledged??.... or ignored??

I am absolutely lost, exhausted trying to understand. I've tried to ask my electric Co a few times, but I'm bombarded with finance terms & just cannot understand anyone ( I even ask if they could kindly explain as slowly as possible, as if I was a child, & I still can't understand). I'm trying to help my old friend.

If anyone can help. Thanks, Zoot

 

[SRGTD]

@Zoot - I’ll have a go at answering your questions;​

• There are two types of energy supply accounts for domestic customers - pre-payment and credit. With pre-payment, customers pay for their energy before they use it and have to physically top up their account using a top up card or key. They take the card or key to the Post Office or shops that offer the top up facility and once the card / key is topped up with cash, those funds needs to be loaded onto the electricity meter by inserting the card / key into the meter

As you’re paying for your energy by direct debit, then you have credit account, meaning you pay for your energy in arrears - i.e. you pay for it after you’ve used it.​

• Monthly variation of account balance; With most - if not all - credit accounts for energy supply where payment is by direct debit you pay a fixed monthly payment, the amount of the payment being based on your actual or estimated energy usage for the year. I think monthly payment of the same amount each month is the norm and IMHO makes it easier for customers to budget for the cost of their energy usage.

No one uses exactly the same amount of energy each month, so some months your payment will exceed your actual energy usage costs (typically during the summer months) and in other months your energy usage costs will exceed your monthly payment (typically during the winter months). That is why your account balance will vary month by month. However, over the course of a complete year, what you pay should be broadly equal to the cost of the energy you’ve used - assuming your monthly payments have been set at the correct level to reflect your actual annual energy usage.​

• Credit and Debit; When you have a credit balance on your account you have paid more to your energy supplier than the cost of energy you have actually used. Conversely, when you have a debit balance on your account, you have paid less to your energy supplier than the actual cost of energy you have used. As you’ve said above, an account that’s in debit means the customer owes the energy company the debit amount. Your energy supply company should monitor your monthly energy payments against your actual energy usage on an ongoing basis and if they feel your payment needs to be increased they should let you know so you avoid ending up with a large debit balance on your account.

• Estimated and actual readings - it’s important that a customer provides their actual meter readings at the required (monthly or quarterly) frequency so the energy company can monitor the customer’s true energy usage and cost against what the customer is paying. If actual meter readings aren’t supplied, then the energy company will use their ‘best estimate’ of the customer’s energy usage for billing purposes and for setting the monthly amount the customer needs to pay. Estimated readings could mean the customer ends up paying too much or too little for their energy and potentially moving into a significant credit or debit balance situation. I have a smart meter for my energy supply where meter readings are sent automatically to my energy supplier, so I don’t have to physically read my meter and my energy supplier always gets an accurate reading.

• Being billed the same amount each month after sending a meter reading online; This suggests that your energy company considers your monthly payments are are sufficient to cover your energy usage. I doubt your readings are being ignored - if you check your energy bill, the meter readings you supplied should have been used in the calculation of your energy costs for the billing period in question.

Hopefully the above is useful and provides some clarity on the points you’ve raised in your post.

 

[Zoot]

@SRGTD

Really appreciate that. That's as best I can hope fir in terms of explanation- far far better than speaking on the phone, where I panic at not understanding, & the person gets impatient with me no5 understanding.

Saying that, I still don't understand the majority of the billing system though. I'll re-read your reply numerous times & hopefully more will click.

I've been in touch with an Energy Representative at EDF, whom I simply requested she could please -call- my dear old friend, in a pickle with his bill. And she did so. And he as a result is happier. But I asked one simple Q to her, twice, to which she didn't answer (rather she bombarded me with everything else xyz & abc which was like a deluge).

That Q being thus: if my old friend, has for some reason, become in debit (why is the financial word debt.. debit with one vowel, absent?? Anyway..) to the tune of "minus £750": is he liable/ is it warranted/ is it normal, for him to write a cheque there & then for £750 to EDF??

Or is it a situation whereby he -leaves- that payment unpaid, & carries on, until I don't know.. some better "balance" figure establishes itself? He didn't get a 'summons' for this debit figure by EDF, but feels obligated, to pay the "outstanding ammount".

I said to him to hang on, because I don't think you are oblidged to pay that/ that your balance "goes up & down during the year, this figure although denoting when your most 'down' let's say, doesn't though signify a bill to pay".

Am I right??

Why is it just me that finds this complicated???? I never hear of anyone else in my boat- makes me feel extremely alone tbh.

Thanks. Zoot

 

[SRGTD]

@Zoot; you’re welcome.

Be aware that this is just my opinion and I’m in no way qualified to give legal advice. However, I think it’d be worth doing some further investigation to understand more about what lead to the large debit balance, especially if it was unexpected. You’ve not said if your friend pays for their energy by monthly direct debit or if they still get an old style ‘traditional’ quarterly bill and then pay on receipt of the bill.

If your friend pays by monthly direct debit, and if the £750 has built up gradually over a long period of time - say 2-3 years or more (worth checking previous bills - if available - to see if this is what’s happened), it tends to suggest either a) the monthly direct debit payments have been set too low, b) energy consumption is higher than it was initially expected to be or c) a combination of the two. It’s worth noting that Ofgem - the industry regulator - has mandated that energy suppliers must regularly review customer direct debit payments to ensure they are sufficient to cover the energy used and that the customer isn’t suddenly hit with a large ‘catch-up’ bill. If the energy supplier is in breach of Ofgem’s mandated requirements then it would be worth investigating further to see what rights and remedies, if any, might be available to your friend; maybe speak to Citizen’s Advice in the first instance?

Alternatively, if your friend’s energy consumption has suddenly increased unexpectedly to generate a £750 debit balance, then it might be due to one or more of the following;

• an incorrect meter reading may have been provided
• there’s a recent problem with the meter and it’s over-reading. You can ask the energy supplier to test the meter for accuracy, although I believe that if the test results show it’s accurate, there may be a charge for the energy company arranging / carrying out the test.
• an unscrupulous neighbour has somehow tapped into your friend’s electricity supply! (apparently it can happen, according to some of the consumer programmes on TV).

I do hope you’re able to get this sorted. Please update the discussion topic with developments. Good luck!

 

[Zoot]

@SRGTD

That's very kind of you again. I'll either fwd this thread, to my friend (can rcv emails still at 97), or read it to him next time I visit: I live 100m away or I'd pop over with it asap.

He'll most likely understand more of it than I do (I still can't really understand the fundamental reasoning of why it's done in this ridiculously complicated way, if a meter with 5 numbers on it, is as simple in principle to provide: & therefore if Ive used a bit more one month vs last month, just bill me a bit more: why can't it be this simple??! Why this infuriating & to me completely counterintuitively illogical need for any "account" situation, whatsoever??!).

[I'm only throwing that question/ rant out as rhetorically- I don't expect you to answer it SRGTD].

I am though, still not understanding (as I think possibly my old friend is a bit confused about too), whether when a debit figure materialises in your account... what the implications are, in terms of an owing/ a payment situation with it.

My friend it seems to me, is taking this minus £750 figure, as being a sum that he thinks he is being summoned for, by his EDF electricity Co.

This is the question I've twice asked a person within EDF via email. First outlining my old friend's a bit confused, by a few things (one of which I assume might be why this debit figure, is so high). She just doesn't reply to it though, rather deluging me with figures for his account. Which just bamboozles my head, when I'm trying to ask a pretty simple Q (with basically a Yes or No answer afaict).

Thanks, Zoot