Thursday, 30 June 2011

EOn Maths - A Cunning Plan

I handle my parents' energy bills for them because they are not interweb savvy and the best deals are only available online. I take and upload monthly readings and search quarterly on price comparison websites for the best overall supplier using the previous twelve months consumption figures.
At the start of June this year, their current tariff, EOn dual fuel FixOnline v6, was coming to an end and massive price increases were predicted. A fixed or capped deal was the best option. So I found that the EON Age UKdual fuel fix offered the best value.
The latest quarterly bill pinged online on 25 June. As a result of the slightly higher price per unit and the end of the 19.8% online discount (someone put the decimal point in the wrong place there!), the annual estimated bill for the next year increased to about £1,200. So one would expect that the monthly direct debit would be about £100 or even less, given that the latest bill was only £.69 in debit and the next quarter would be another credit-builder. Autumn-Winter debits, Spring-Summer credits, result balance.
However, according to EOn, the monthly direct debit amount would increase to £115 from 2 August. When I did "Ten A Day" mental arithmetic before lessons started at school aged seven, 12 x 115 was 1,380.(Look no fingers!).  Therefore my parents would pay an extra £180 that would be refunded after the next Annual Review.
As I don't agree to forced loans at nil interest, I phone EON Customer Service to suggest a compromise amount of £95. In previous years, EOn have been very customer focused and have agreed more sensible direct debit amounts where necessary. Not so today: a "zero tolerance" scheme of no compromise had been put in place a month earlier. If the computer said No or £115, that was the only answer. That's the way to motivate high calibre staff in the call centre.  Apparently, the increase was for my parents' benefit so they wouldn't get into large amounts of debit  in winter. I explained that the idea of quarterly direct debits was to spread the cost over the year so that at the end of twelve months the account would be in balance. Not so, according to the EON rep who informed me that EOn wanted to set the direct debit so that the high demand quarters were always in balance. A bit like a quarterly bill then, you pay for what is actually consumed.



I asked if I could speak to somebody who could make a decision to overrule the computer. That was impossible; there were three options: accept the increase, change to higher price quarterly billing or find another supplier. ie Take It Or Leave It as they say in the adverts.  There's no such thing as customer loyalty in a market (this is the price) where churn or turnover of old and new customers is priced in.
Given no choice I accepted the revised direct debit with the proviso that I would demand immediate repayment of monthly balances after I uploaded meter readings. And then I checked the small print on the bill:

Now, I changed the tariff to Age UK Dual Fuel Fixed on 13 June 2011 and it turns out that the next Annual Review date is April 2012. So the number of months left is just about ten. That explains the crooked direct debit maths. £1,200 / 10ish = £115.
I bet there is a cunning finance acoountant scumoid rodent in EOn who was licking his lips when he came up with that plan to increase EON's cashflow and ensure that the two coldest quarters are paid off pdq. As I said to the EON minion, Heads you win, Tails I lose. Of course, the fact that my parents have bought electricity from EOn since it was Powergen and EMEB before privatisation counts for naught. Computer says new tariff started 13 June 2011 so calculations must start from then.

Update Saturday 2 July 2011: Reader, I transferred the dual fuel contract this morning to EDF Fixed to April 2014. My parents ought to save another £50 per year. Just keep checking your annual consumption figures (on every bill now) into USwitch every week to see if a better tariff turns up.

Update Wednesday 6 July 2011: Possible cartel behaviour to be investigated by Ofgem.

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