To be confused by my EDF Energy Bill and new Direct Debit

[singinyapraizas]

I live in a large-ish 4 bed house - a 1939s semi, solid brick (no cavity wall ins, except on the kitchen/loft extensions). Like many people, we were careful with our use of the heating last winter due to the rising prices, though it was on every morning and evening in the rooms we use most. We're on standard tariffs, not fixed rate. Our direct debit for gas and electricity has been £220 a month for the last year.

I knew that prices were going down, but I was surprised to see they've adjusted my DD to just £70 a month. I checked my account, and it says I've built up a whopping £780 credit! I thought that easily explained the reduction in the DD, but when I checked the blurb it read as if the £70 a month is actually what they think is needed to cover my usage over the next 6 months, with no reference at all to reducing the balance. I would like to phone them to verify this but unfortunately their helplines aren't open at weekends (and of course weekends are the only time I ever have headspace for this stuff).

There was a "manage your direct debit" option, which I have now used to reduce my DD even further, to just £20 a month! If our usage really is £70 a month (which I'm sceptical about), the reduction to £20 should gradually reduce our balance over the next year.

Am I missing something? Are other people seeing big balances?

The £70 bit will taking into account your balance. It’s the way it’s calculated, it’s not clear but no chance can it be at £70 for size of house unless you keep the house like an igloo or have the best insulation!

Check when next months bill is generated. You can easily work out your bill if you have at hand usage, standing charge and unit prices on the tariff you are on? Can post them here and can illustrate it for you, should be on your last bill.

This is the bit that explains how it's calculated, with no reference to the balance.

I agree that looks wrong. If you built up the credit over a year, that’s £65 a month, and would suggest that £220 - £65 = £155 of your DD was going to fuel.

I wouldn’t have reduced the DD, just left it at £70 and watched what happened.

Might be worth querying with them. Better to pay the right amount now than to have a huge reckoning up in 12 months time. I’d have addressed the credit by asking for a repayment, then stuffed it into a building society so that I got the interest on it not them.

On the other hand, if you built up your credit from nothing in 6 month not 12, £70 would be nearer the mark.

You should know what you used in kWh for energy last October to March. So that should tell you what your predicted bills would be.

£639 in energy for the next 6 months seems low - especially as it's the winter months.

If you are that much in credit ask for it back. I'm sure this has made news before. All these energy companies sitting on a fortune making interest on our money!! Ask for it back and you stick it in a savings account. And then leave your dd at £70.

Unless they are looking at your balance, working out that you will spend £639 PLUS £780 (your balance) - so that is £1419 you will spend on energy in the next 6 months,

So they think you will spend £1419 on energy in the next 6 months.
You have a balance of £780.
So you will owe £639
Spend £219 in September on DD
That leaves £420
£420 / 6 = £70

So in March, you will owe nothing and have no balance.

She could ask for it back - which would mean that she would still owe £1419 over the next 6 months - so her debit would be £1419 / 6 to pay back - so about £240 a month - to neither be in credit or debit at the end of March (assuming that's how much energy she will use)

I think @cakeorwine has it right. They are trying to run you down to a zero balance. I wouldn't leave your payment at only £20 or you'll soon end up with a debit balance.

P.s. I'm in a 4 bed detached house in Scotland and my actual usage last month was £150 electricity and about £45 gas. We pay £225 per month and have a small credit balance.

I'd still rather ask for it back. Why should it be sitting in their accounts accruing interest? Ask for it back, stick it in savings and then pay it back in March when you get your bill
These companies do this for a reason and are making millions from us.

Your balance should be about zero at the end of April so they have worked out what you need to be pay on top of your current balance for that to happen, assuming your energy use will be the same this year as last year.

But if you pay by a regular DD, you are either going to end up with a positive balance in the summer months or a negative balance over winter.

Either way - you end up paying the same over a year - it does look like the DD was set too high at the start of the year.

I would ask for the money back. It is worth putting in a savings account now interest rates are quite high.

I found EDF so confusing that I called them up and changed to "whole amount monthly" and I send them a meter reading every month. This means my bills (other than in the summer when they billed 2 months at once because they gave everyone a new account number and presumably messed up billing), are based on use in the month concerned - tiny in summer, massive in winter - no big credit or debit balance. My route will not be right to many others who will not like to lose the smoothly out of summer and winter bills but it is much easier to understand and I love it.

Is your bill correct and up to date?

No mistakes with meter readings or large unbilled usage?

I agree it sounds low for your circumstances but it could be correct if you're very careful. Plus £400 of the credit could be due to the credit from the government last year.

This

This is what they are thinking

mine keeps getting reduced, I actually increase it back. I want to be able to switch on the heating without worrying. Last year was quite mild, this year may not be. I prefer to have a small balance at all times

Same for me on BG - they were charging me £400/month and I had built up a credit of over £2000 which seemed crazy. They have now reduced payments to £60ish which is lower than it was before the energy crisis. I don't mind the decrease but would rather we hadn't had to cope in the meantime.

It says that they think you will use £639 from now until your next bill. They have deducted £219 payment from this, then divide the balance by 6 which gives £70 a month.

They seem to be ignoring the credit balance.

The only way you can clarify it is to call them , but it reads pretty clear to me.

I have a smart meter, so it should be ok.

When they say you'll spend £639 on energy between now and March 4th, I take that to mean it's £639 on top of your credit of £780. They don't mention your balance because it's money you've already spent.

I wouldn't reduce your DD even further than £70 if I were you.

How often does EDF produce a bill? You may have a smart meter but just because they take readings regularly doesn't mean they are using them to produce a bill each time. If they only bill you twice a year then your credit will get quite high from the monthly payments and then drop when the bill calculated.

And certainly for me EDF had a big accounts change in the summer, new customer numbers for everyone, IT system change and in my case they billed after 2 months and no bill the month before which looked confusing to me. Hopefully that has all settled down now with their new IT system but worth double checking perhaps by sending them an uptodate smart meter reading or requesting a bill based on their latest smart meter reading ( I don't have a smart meter).

They don't use the smart meter readings for the bill?!

okay, that explains a lot about the mystery of mum's bills!

They will use the reading closest to when the bill is produced. They will be recording all the other readings but not producing a bill each time.

E.g. they take multiple readings between January and June but only produce a bill from the last reading taken in June. The direct debits from January until June will build up giving a large credit balance and then when the bill is produced in June the balance drops back down again.

In contrast I am with Octopus and they ask for a monthly reading. When I give the reading an online bill is produced and I can see how much I have been charged and what my up to date balance is every month.