Target Balance according to EON is to be about in credit by a week's usage at the end of March.
Here's the tale so far:
31st March Credit £348, direct debit being charged at £264 / month
3rd May Credit £730! Direct debit reduced to £100 per month to use up the credit which was discussed and agreed with them over the phone.
...roll forward to...
20th July Credit £224, usage was £123 / month with £100 per month direct debit
Got an email today from supplier stating: Even though you're in credit by £224.81, you're using an average of £175.28 more each month than your current Direct Debit (DD) payment covers, which means your account balance is £74.88 behind where we'd expect it to be at this time of year.
And they want me to make: one off payment of £74.88 on a credit or debit card, and by changing your monthly DD to £275.28 This highlights that the supplier wants to me to have a balance of around £300 in the account. Which with 5.6Million customers is then about £1.5Bn of customer money in their bank account!
There is a simple solution if you don't agree with their calculation methods,
Switch to Variable DD where you pay your monthly bill in full every month. Work out your own average over a 12 month period, add 10% as a buffer and then pay that money every month into an interest earning account. Pay your monthly DD out of that account.
That way, you never pay a penny more than you are billed and any interest on your money is your money, not theirs.
Don't shoot me, I'm only the piano player. I DON'T work for or on behalf of EON.Next, but am willing to try and help if I can. Not on mains gas, mobile network or mains drainage. House heated almost entirely by baby dragons.
It is very hard to determine the rights and wrongs of how Eon Next want to set the DD amounts as there is no mention in your initial post about kWh consumption. They may be right or very wrong in how they have arrived at the £ estimate for the next 12 months.
As a first step I'd suggest you do your own energy audit working out the most recent annualised advance of your kWh consumption (using accurate meter differences between 2 bills approx 1 year apart). If you don't have working smart meters or do not submit regular monthly meter reads yourself this may prove difficult. You may already know these kWh numbers but please forget about the £ figures to start with. Now compare this with the kWh EAU (Estimated Annual Usage) figures that you see on your most recent bill. These figures are what Eon Next (and most other suppliers) will be basing their DD amounts on. They may be reasonably accurate or they may be somewhat wide of your most recent annualised advance. If you wish to stay on a fixed amount DD (which is re-assessed every 6 months or maybe less) then you need to have a good handle on your kWh consumption especially if this at variance (15% higher) to the EAU numbers churned out by 'the industry' for your property. You might need to have a conversation with CS at Eon Next every 6 months or so to get a manual assessment of the DD amount set for the intermediate future as you did earlier this year?
Either that or do as myself and @retrotecchie (and others) do and provide accurate meter reads manually (or smart) and settle the bill via a Variable DD mandate some 16 or so days after the bill is raised. No interaction with CS needed re billing issues as some of us can testify to. 👍
the notion that you credit should be at a particular figure is false. You direct debit should be estimated cost of 12 months consumption at current prices, plus or minus any credit/debit on the account and then divide by 12. Obviously energy companies like customers to be in credit but it’s not mandatory, and in general balances are much higher that really necessary. The best time to commence a fixed Direct Debit is in the autumn, because then accounts will usually be in debit during the peak winter months. Only returning to zero after 12 months.
Current Eon Next customer, ex EDF, Zog and Symbio. Don't think dual fuel saves money and don't like smart meters. Chronologically Gifted. If I offend let me know by private message, but I’ll continue to express my opinions nonetheless.
My aim had been to start the autumn / winter increased bills with a just a small positive balance. With a fixed DD this would drop into the red by the end of the winter with the summer/autumn months essentially paying off the debt. The main driver over usage is turning off the gas central heating!
My latest bill has Elec EAU 6142.7 kWh and gas at 28394 kWh.
Elec bill usage is 1st Jul 2023 2260.1 to 1st Jul 2024 8092.5 Smart meter reading so their EAU is about 310kWh high so about 5%
Gas bill usage is 1st July 2023 947.6 to 1st July 2024 3497.1 Smart meter reading so about 2,550 m3 which using their conversion factors is around 28,177kWh. Their EAU is about 217 too high or about 1%
Although I don't know what tariff you're on or what region you're in, based upon your EAU numbers I worked out an approximate monthly payment of £290 which is close to the £275 that E.onnext have suggested in your original post.
Personally speaking I'd be happy (accepting?) with EAU's that are within 1 and 5%, although I would have expected the electric to be within 1% and gas 5% as the electricity consumption should be far more consistent.
When your usage is as high as yours and monthly payments are around the £300 mark as in your case, it doesn't take much to make your balance swing wildly.
If you had a credit balance in your account of £300 or even a bit more around August / September, I'd be happy with that because that'll likely be gone by November and you'll then be in debit and you'll slowly pay it off as you've said above. The only problem is when E.onnext do their annual account review, as a large debit balance may suggest a DD increase because they may want to claw it back quicker. It also depends on the severity of winter.
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