An energy question from an idiot

[Crunchymum]

If this is my usage then why am I paying a DD of £150 per month?

Standing charges?

I would think because the DD will stay the same for 12 months, but your usage will go up in the winter.

Depends on what kind of tariff you are on but most families use far more in winter than in summer but by doing a DD it all (should) even out over a year.

i think a smart meter is a good idea because then you will know exactly how much you are using on a given day.

Because your DD is a set amount, you are building a surplus is the summer.

Do you pay a fixed and overpay in the summer to make up for winter?

Because they take what they think you will use over 1 year and divide by 12 to give equal monthly payments. You then build up a credit over the summer and then use the credit up over the winter. It keeps your payments equal so you don't get hit with a big bill in the winter

We pay the same d/d every month. During the summer we overpay and end up in credit (which we are now, by about £100), and it then evens out in the winter when our usage goes up.

Every now and again, they will amend the d/d if they think it is necessary.

Although with the prices jumping in October any credit balance will not last long

Because you build up credit in the warmer months to save you getting in too much energy debt all winter.
It's less hassle and easier to budget with a static DD.

Yep, as others have said it's to keep your payments stable. Otherwise you could pay £80 in July and £400 in January. Which is fine if you have the income to do that or have put money aside, but most people favour a set monthly amount to allow them to budget.

I told you I'm an idiot.

Of course the DD is the annual charge split by 12 months!!

I've always given monthly readings and my last two annual statements were correct for usage so we are paying as we should.

An idiot wouldn't have asked the question though. Glad that makes sense.