Powergen: billing inaccuracy

Why is it a misnomer?

Scottish Power have this option too. It happens to be the case, as one might expect, that the lower rate is the same as that which applies when you take the default (i.e. "standing charge") option, and that the difference between the higher and lower rates, multiplied by x, is equal to what would be the standing charge per quarter. So far, so good. It simply means that the two options work out as costing you the same if you always use x units or more per quarter, but if you ever use less, it's cheaper to take the "no standing charge" option.

Would you care to go into a bit more detail? Remember the billing periods don't exactly coincide with quarters, so if a bill covers two or four months, you should pay the higher rate for the first (2/3)x or (4/3)x units. If there is a price change halfway through the billing period, with no meter reading taken on the watershed day, they will estimate a reading, but this need not be halfway between the start and end readings, since it would take into account demand profile for the time of year. If you heat electrically, for instance, the colder half of the billing period will get more units estimated into it than the warmer half.

"Ronald Raygun" wrote

So why do they offer the "with standing charge" 'option' ?

If they explained their 'options' to every potential customer properly, then everyone would "choose" the "no standing charge" 'option' :-

"Option 1 will always be either the same or more expensive than Option 2. Option 2 will always be either the same or cheaper than Option 1. Which do you want, sir?..."

It makes it easier for customers to do accruals properly. :-)

Why do banks offer deposit accounts which pay risible rates of interest?

"Ronald Raygun" wrote

Do any offer two different types of account, where one has a risible rate of interest and the other doesn't, and *all* other features are *exactly* the same??

I think you may have answered your own question (below).

I used to be on a standing charge tariff, then with big fanfare, the utility company announced that they were removing the standing charge but charging a higher per unit rate on the first so many units and a lower rate per unit above a given threshold. If you didn't exceed the threshold, it might have been slightly cheaper. If you exceeded the threshold, it worked out about the same as the old standing charge basis. Most quarters, I've exceeded the threshold.

Therefore I contend that that the tariff where you pay a higher rate on the first n units and a lower rate above a certain threshold amounts to a standing charge, so calling it a "no standing charge" tariff compared to the previous arrangement is a misnomer.

The utility company works on 91 days per quarter. My bill covered 86 days and I had used 994 units (electricity) Powergen have a threshold at 200 units / quarter They had assessed me on 199 units at the lower rate. It should have been (86 / 91) * 200 which is 189

Not a big deal, but worth a quick check, and why pay the utility company more than necessary...?

Allan

But that's only true for customers who exceed the threshold. Customers who use less, e.g. when the occupiers are away for an extended holiday, and if they use only 1 unit during the whole quarter, they will pay (whatever it is, say) 20p for the whole quarter instead of (say) 13p for the unit plus 11p per day for 91 days. I think it is perfectly well named.

You mean at the higher rate, don't you? It's the *first* 200 units which are *more* expensive, and the rest are cheaper, so if the period had really been 91 days and not 86, you would have expected to pay 200*higher + 794*lower.

Or less? It seems to me you complained because you were undercharged!

For a totally strict "all" and "exactly", probably no, but for "near enough the same as makes no difference", probably yes. Typically accounts get rebranded and superseded by "sexier" ones, and the banks rely on customer lethargy to boost their profits by paying out less interest on the old accounts because savers don't bother "upgrading" to the new equivalents.

Strictly speaking the old ones are no longer "offered" in the sense of being available to new customers. But they continue to be retained for existing customers.

But it is true if, like me, you use zero units in a quarter. The reason for this in my case is that the only gas appliance I have is broken and I will not be using any gas until it is fixed, but I want to keep the account open for when I do get it repaired and start using gas again.

a) I originally posted to advise readers to check carefully: that's all b) My original premise was that generally I exceed the threshold and therefore _I_ consider it to be a misnomer especially they shifted me onto said tariff with no notice: of course, if you use minimal gas every quarter it's a better deal c) I was over-charged

Fine!

Allan

Your mistake is forgiven.

But the figures you supplied do not back this up. They show that you were under-charged.

"Ronald Raygun" wrote

Then it is totally different to the situation where *both* "standing-charge" and "no standing-charge" options are actually offered, at the same time, to new customers!

"Ronald Raygun" wrote

Eh?

He said that he *was* charged for 199 of the units at the "higher rate" (the one applying to the *lower* band of units). He said that he *should* have been charged for 189 of the units at the "higher rate" (the one applying to the *lower* band of units).

So surely he was charged at the more expensive rate, on 10 *more* units than he should have been - ie *overcharged* ??

Correct. My mistake. I guess after he used "lower rate" where he meant "higher rate", despite my correcting him I must have only half recovered from a jarred sense of direction. Sorry.

No, it's not totally different. The no standing charge option is also offered to existing customers, not just to brand new ones. So for those customers to whom it would make a difference (because they're low users), being offered the option, while it's nevertheless not rammed down their throat, is similar to being offered the ability to switch to a sexier deposit account without being pushed into it.

Agh. Isn't it nice when we all play nicely together? Well done for an exemplary show of respect fellas.

"Ronald Raygun" wrote

I don't agree - I think the situations are quite different.

With the "(no-) standing charge" options, we are talking about being faced with the option when you *start* taking electricity (or whatever) from that supplier. At that event, there is *never* any point in choosing the "standing charge" option. You should *always* choose the "no standing charge" option - which will then be either the same as the other option, or cheaper.

With the bank accounts, you didn't have the choice of the better account when you opened your account. So the choice didn't exist.

The option doesn't only exist when you start. You can select it at any time after you've already become a customer too.

Actually, that's not entirely true unless paying the least amount is your top priority. The standing charge option makes budgeting so much easier. :-)

If you put it like that, you're right, but that's not how it works. You don't get a big sign shoved in your face urging you to decide whether you want plan A or plan B. There's just something in the fine print saying there's a NSC option, and if you want it you have to ask for it. So most people are unaware of it and just get the default.

The choice didn't need to exist, because at the time it *was* better.

"Ronald Raygun" wrote

But at the start, what's the point in asking what option the customer wants? Unless, of course, you don't tell them your options!!

That's it, they don't really ask as such. They simply sort of mention in passing that the NSC option exists, and you need to read fine print to find out how to exercise it.