Are you being overcharged by your electricity provider?

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We recently interviewed Jon Fletcher, CEO of Big Clean Switch, and he told us that an astonishing 50% of homeowners in the UK haven’t switched electricity providers in years, and this is one of the reasons that Ofgem (the UK’s independent energy regulator) has implemented the default tariff cap to prevent consumers from paying astronomical amounts for their electricity and gas. Since starting the My Home Farm sustainability blog, we have been contacted by hundreds of people about renewable heating and heat pumps, and I’m amazed by the way people generally approach paying for electricity.

Most households are in a “monthly budget” mindset where they set up direct debits to pay for their electricity, and they have not taken unit tariffs or standing charges into account. This becomes all too apparent when you visit an electricity provider’s website to get a quote – you input your annual consumption and you’re presented with a quote per month and what your annual bill is likely to be. On most websites you have to click several times to find out what the actual kWh tariff is. Based on this, I can understand why the regulator stepped in to prevent electricity providers from overcharging, and frankly ripping households off.

Now, more than ever, as the energy crisis in the UK rages on, homeowners should start to pay close attention to their utility bills. Our supplier was one of the many that went bankrupt this autumn and winter and our account was assigned to E.ON Next. We’ve 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.”

On Friday, the entire process was completed and we signed into the portal. The direct debit has been successfully set up, our balance from the previous provider has been carried over, but our tariff remains unchanged. It’s still 23.17p/kWh with a standing charge of 28.04p per day.

The obvious issue here is that E.ON might be relying on homeowners to not notice this, and it’s an easy way to make some extra money at a time that 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.

The other cause for concern in our case is that this tariff, E.ON Next’s default tariff, exceeds the cap amount for a direct debit in our area. 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 (thanks Kev M for finding this) then compare it to what you’re being charged by your provider.

We lodged a formal complaint with E.ON today and I’m going to be very interested to see what they say in response. I’ll update this article when we receive their reply.

In closing, 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.

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michael Fitzgerald
6 months ago

I too have been moved from Symbio to E.On at the same rates as yourselves.

Will be interested to see if you make progress.

Mars
0 kWhs
Reply to  michael Fitzgerald
6 months ago

Thanks Michael. Did you set up a direct debit too? Can you please tell me which region/area you’re in?

Mike
Reply to  Mars
6 months ago

Mars I live in Herefordshire- the West Midlands.
Mike

Mars
0 kWhs
Reply to  Mike
6 months ago

Thanks Mike. I’ll keep you updated on what they reply with.

MarkC
55 kWhs
6 months ago

I’m struggling to understand how the cap price of £1277 relates to price per kWh for electricity?

Flowboy
0 kWhs
5 months ago

Yes, the elisions, evasions & subterfuge of power companies…
We have had the same provider for over 10 years. It is partly laziness that we have never switched but also, a pain dealing with large companies with semi-automated &/or offshore call centres, where no one has any power to make decisions or fully understand you when a problem arises.
We recently had to have a meter changed. The tech arrived, looked at our setup & couldn’t fit the meter he had been booked to use. He in fact had a spare correct meter but wasn’t allowed to fit it as it all had to be put through the head office system first. He had to return another day = 2 days off work for me. Completely insane. We simply do not want the hassle if bills/ accounts start going awry.
Re. bills, they are easier to understand than they were but still not great (tbh with DD I never look at them but will have to start being more attentive) For example our (& the historical uk) experience with economy 7 storage heaters is the costs are well hidden; eg various daytime boost settings on the heaters – all of which can triple your bill, being charged at outrageous rates, yet on the power co website it was extremely hard, to impossible to find details of the real running costs. So many people run them wacked up full all day & struggle with terrifying bills, without realising it would be way cheaper just to have std plug in heaters running on the std daytime rate. If we are only going to save £100-£ 200 by switching I can probably drive a few miles an hour slower & save that on driving costs instead, with less potential hassle. So no, I don’t trust these “utilities” one bit. One is likely to be as bad as another…

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