[meldrewreborn]

My electricity consumption dropped markedly when I replaced my freezer nearly 2 years ago. My EAC has dropped gradually over time, except when it stayed the same for 3+ months. Recently though its actually gone up although my actual consumption has not.

We've tried to delve into this before and we've heard the explanations of how its supposed to work, but the evidence is that the system for producing this data is broken.
@Lee_EONNext Would you like to drop me a DM and I'll give you my details. I'd like somebody to explain why the computed EAC figure is so much out of kilter with reality.

In July the EAC is quoted as being 1664kWh. Yesterdays bill says its gone up to 1760kWh, an increase of 96kWh or over 16%.

[meldrewreborn]

@meldrewreborn

[Mailman]

@meldrewreborn

Although my usage has plateaued over the past 2 years the EAC numbers for my own household continue to be above my calculated annual advance (using 'smart meter readings'). Even if I use the highest Monthly usage numbers (on 2 years worth of data) the EAC continues to be above where it should be. Matters not for me on VDD but I agree the EAC system appears to be over-estimating usage and has been consistently for over 2 years now. I'll see where it goes on my next statement due on Wednesday.🤔

[Andy65]

I don't think that you'll ever get an explanation @meldrewreborn, at least not one that makes any logical sense.
I usually don't look at my EAC simply because like you, I know what I actually used every month for years.

However, if I look at my electricity day usage over 4 months, it's increased by 3.8% but the EAC has increased by 17.9% over the same period. My night usage has gone down by 12.7% over the same period but the EAC has increased by 2.9%.

My gas usage in the summer months is minimal so a small change reflects in a large percentage, so over the same 4 months my gas usage increased by 33%. The EAC has gone down by 8.7% though.

If I take my actual annual usage averaged over the last two years, then the latest EAC for my day rate is 13.7% higher than my actual. For my night usage the EAC 12.3% less than my average and the gas EAC is 23.7% below my actual average.

Looking at my numbers I can't see any pattern as to how they are getting the EAC, they're not overestimating across the board in my case. Gas is too variable if you have gas central heating but assuming that a customer doesn't have electric heating, you'd expect the electricity numbers to be far more accurate than they are.

[meldrewreborn]

@Andy65

If the EAC is a fundamental part of the setting of fixed monthly Direct Debits for customers, then it should at least be intelligible and auditable, which currently it is not, indeed the opposite applies.
The upshot is that the debits are set at too high a level and overall implies a massive interest free loan from customers to suppliers, unless the customer strongly objects - which most don’t. If the supplier has their own data why don’t they use that rather than flawed data nobody can understand?

I think that it should be mandatory for suppliers to pay interest on credit balances to discourage the setting of debits at too high a level.

[retrotecchie]

@meldrewreborn

When I joined OVO in 2009, they paid 3% on credit balances as did Igloo before they went bust. Apparently the energy companies aren't allowed to do that anymore.

3% was more than I was getting in the bank at the time so I used my OVO account as an alternative to an ISA. The interest on my account sometimes covered a monthly bill as I was regularly putting a few hundred a month in there over a couple of years, back in the day! When I moved to Wales, I wanted to bring OVO with me but they don't do single fuel customers in Wales, so I closed the account and took over £3000 of savings with me!

[theunknowntech]

Indeed. OVO had to get special permission from Ofgem to run that scheme and I suspect Igloo had to get it as well. But that was when times were different and these days, Ofgem doesn't want customers stuffing massive credit balances into energy accounts, which was the ultimate reason for killing those things off.

Arguably, with the profit margins sliced even thinner when 99% of the customer base goes onto SVT, it becomes unviable to run such schemes anyway.

[meldrewreborn]

@theunknowntech

So not allowed by OFGEM. Has their alternative approach worked to the customers advantage? OK unviable if its a supplier scheme - but what if they were mandated to do it? What effect would it have on their attitude?

[theunknowntech]

IIRC it was both a combination of an Ofgem demand and the huge numbers of customers switching to SVT that made continued operation of the interest thing impossible to keep around.

I honestly can't see a mandated interest scheme working unless the market goes back to pre-covid behaviours.

[Andy65]

Originally Posted by meldrewreborn

@Andy65

If the EAC is a fundamental part of the setting of fixed monthly Direct Debits for customers, then it should at least be intelligible and auditable, which currently it is not, indeed the opposite applies.
The upshot is that the debits are set at too high a level and overall implies a massive interest free loan from customers to suppliers, unless the customer strongly objects - which most don’t. If the supplier has their own data why don’t they use that rather than flawed data nobody can understand?

I think that it should be mandatory for suppliers to pay interest on credit balances to discourage the setting of debits at too high a level.

I agree with you @meldrewreborn about the accuracy of the EAC, my experience with e.onnext is that the direct debit levels have been set well on my account. If anything they've been set a bit low and on at least two occasions I've raised it myself.

The problem with paying interest on credit balances is wouldn't they then be entitled to charge interest on debit balances? You could have a rule that says the customer credit balance can be no more than say, 3 to 4 times their monthly DD payment.