Energy Companies - Low Balling

[Nemo]

I recently switch energy companies and started paying about 2/3 of my previous monthly bill. Sounds good but I'm just building up a liability with the company who now estimate my annual consumption of electricity at about £2,300 and gas at £900 (we live in a biggish house!). They are currently collecting less than £200 a month.

I used the switching sites to check on costs but this 'low balling' to get new business is something that I have come across before. I've searched but can't see of any way of avoiding this.

Anyone come across this and found a way of getting round this practice?

[pochisoldi]

I recently switch energy companies and started paying about 2/3 of my previous monthly bill. Sounds good but I'm just building up a liability with the company who now estimate my annual consumption of electricity at about £2,300 and gas at £900 (we live in a biggish house!). They are currently collecting less than £200 a month.

I used the switching sites to check on costs but this 'low balling' to get new business is something that I have come across before. I've searched but can't see of any way of avoiding this.

Anyone come across this and found a way of getting round this practice?

1) Keep a record of your annual fuel consumption
2) Open a TSB current account paying 3%, Put a "float" in there to start off with, and have your energy bills debited from it.
3) Use (1) and work out what you expect your annual energy costs to be, then each month transfer 1/12th of that amount from your main account to the TSB account. Treat that money as "ring fenced"/"money already spent".
4) When the "shock" bill arrives, shrug your shoulders and pay it using the balance you've built up and the interest you earned on it.

For (2) you can substitute any current account which pays interest or offsets against your mortgage.

PochiSoldi

[Alaric]

Anyone come across this and found a way of getting round this practice?

Isn't it rather pointless to compare the monthly bills when what you pay is determined by the price per unit of energy? That can be more complex to compare than it looks if there are standing charges which you pay regardless of consumption. Thus you need to input an estimate of your consumption to compare prices and filter out how much you are lending to them with a high monthly payment, or being given credit with a low one.

Personally I do not use the monthly estimate system, rather pay the bills quarterly as they arise. Monthly expenditure is never constant anyway, so having a cash float to cover fluctuations is necessary anyway.

[Nemo]

Isn't it rather pointless to compare the monthly bills when what you pay is determined by the price per unit of energy?

I've tried monthly bills, annual spend and units of energy (I keep a check), but still meet low balling whichever I use. However, there must be some connection with bills and price per unit of energy used.

That can be more complex to compare than it looks if there are standing charges which you pay regardless of consumption.

I've tried this and can't seem to get a sensible outcome

[Alaric]

However, there must be some connection with bills and price per unit of energy used.

Those who get quarterly bills still see it directly. But ultimately the question you need answers for is this:-

For a consumption of x units of electricity and y units of gas, what is the estimated annual cost? Only once this is established should you consider how to pay for this. Would you prefer a high monthly payment and a periodic month 13 rebate, or a low monthly payment and a periodic month 13 additional bill.

[bruncher]

I have switched frequently, and I use a simple comparison of the tariffs and standing charges to make my decision, based on dual fuel, direct debit, and fixed price for at least a year. Many companies are strangely reluctant to provide tariffs, instead offering you a monthly estimate based on whatever you tell them is your current usage. No thanks.

I even had Scottish Power (last year's provider) calling me up telling me they wanted me to come back and had a great deal for me. I said fine, just send me the tariff. They said "we can't do that for this offer". Goodbye.

[neversay]

As someone who changes supplier every year, I'm in a weird situation. I was just starting a transfer away from Future Energy to EON when Future Energy went into receivership and was replaced by Green Star. However, I stopped the EON transfer when Green Star offered to keep my existing very low tariff until September. For the last 5 months, neither company says I have got an account with them or is taking any responsibility for billing me. Green Star say I'm on the national database as EON but according to EON they have cancelled the transfer 'like it never happened.' Plus none of us have any meter readings for the interim. So I'm in a kind of energy limbo at present trying to either (i) find someone who will sort this out - after countless phone calls, or (ii) enjoying free energy for years to come...

[JMN2]

Yesterday I had a look at dual fuel offers, usually the electricity (which I use very little) tariff and standing charge were a bit higher but gas (which I use a lot more) tariff and standing charge were quite a bit lower so there would be a saving of £100-150.

However
1. some of these companies I've never heard of, when I look them up I can read some customer "service" horror stories about billing etc.

2.!!!!! many companies have now included the smart meter with the contract, a handy way of getting rid of gen1 meters I am sure!

I don't want to save £100 if it means fighting over billing and meter readings.

[bruncher]

My energy supplier has gone bust!

Ofgem protects Iresa customers' supplies and credit balances

https://www.ofgem.gov.uk/publications-a ... t-balances

The advice is to do nothing and wait to be assigned a new supplier - which I can apparently switch from without penalty. We'll see.

IRESA was cheap. Maybe they didn't buy enough gas for the cold winter we've been through, and had to pay high prices to top up?

[mutantpoodle]

if you are really worried about 'low billing'
ring supplier up and tell them to increase you monthly hit!

simple

if you want to use a switching site simply declare a higher useage in estimates pages
your new monthly charge will be based on that

[bruncher]

I'm not worried about low billing. Perhaps I've totally misunderstood the original post, which I thought was about energy companies giving unrealistically low quotes to get new customers.

[PinkDalek]

I'm not worried about low billing. Perhaps I've totally misunderstood the original post, which I thought was about energy companies giving unrealistically low quotes to get new customers.

It would appear to be about possible low balling (which is unclear though), followed up with low billing, for whatever reason.

[mutantpoodle]

thats probably my fault then

I assumed 'low balling' was a typo

and replied with 'low billing'

so what is 'low balling'???

[pochisoldi]

thats probably my fault then

I assumed 'low balling' was a typo

and replied with 'low billing'

so what is 'low balling'???

Suckering in customers with a low monthly direct debit quote which underestimates the amount of energy consumed.

PochiSoldi

[mutantpoodle]

ok so I had sort of imagined that is what it must refer to

but are people who use comparison sites really that stupid?
I mean the results are only an indication based on what your (in theory) input shows

the only REAL comparison is to then go to DETAILS of proposed deal and actually see the tarif

maybe i give too much credit...