Is your energy billing system overcharging you?

Emma Williams
By Emma Williams November 13, 2011 16:45

Is your energy billing system overcharging you?

Managers might reasonably believe that their energy concerns start and end with obtaining the cheapest unit cost and finding ways to reduce consumption. However, there is a black hole that is costing Britain’s businesses an inestimable combined cost, but which the majority are completely unaware of: this is the numerous faults that exist with energy suppliers’ billing systems, metering and processors.

The systems that produce your gas and electricity invoices are not perfect; in fact they are far from it and, as a result, are often programmed to overlook issues in order to continue with a billing cycle and get the invoices out on time. This allows incorrect data to be passed as correct, which is only likely to be identified and contested after independent detailed analysis.

Metering can become faulty without being recognised by your supplier, but more often, readings can be taken incorrectly, applied to the billing system incorrectly or be corrupted by the billing system itself. In regards to the latter issue of data corruption, the amounts can be quite significant. Our most recent case resulted in an overcharge of £15,000 to the gas account of a golf club in the north west. We have yet to discover why the billing system acted in such a random manner; unfortunately, when asked, the supplier could not shed any light on it either. It is not surprising that the same supplier also has problems with its electricity billing and recently overcharged another customer’s account by £8,000 owing to a recurring fault on their system. We have been aware of the existence of this particular problem for the last five years and despite identifying several accounts as overcharged and obtaining refunds for them, it is still occurring, which shows that there is nothing in place to correct the system as a whole and only individual cases are amended when requested. One might assume that this is because this error is always in the supplier’s favour.

Each regional supplier’s system has its own quirks and foibles, and certain tariffs and metering can not easily be transferred from one supplier’s system to another’s and consequently, the deregulation of the industry has, in some cases, compounded the problems and made them harder to identify, explain and achieve resolution with.

It is not easy in any case to explain to some supplier personnel what it is that is actually wrong with their bills. Unfortunately, it has become commonplace for some energy suppliers to give nonsensical answers to perfectly reasonable customer queries. One might assume that this is either a deliberate policy designed to break the resolve of anyone that has found fault with their supplier, or it may just be that they really don’t understand their own systems.

Our involvement so far in the field of auditing energy accounts has uncovered an extraordinary range of overcharges in what is, relatively, only a minute fraction of the business customers in this country. The total amount that must be currently owed by suppliers for unidentified overcharges is almost unimaginable.

The media often reports that energy supply companies are ‘overcharging’ customers, however, it is usually only with respect to unit charges or not passing on the easing of market prices. The overcharges that we refer to remain widely unreported, but the consequences can be catastrophic for those that are affected by them. The lack of publicity for billing system errors suggests that there may be a scarcity of companies offering the type of specialised audit that is required to uncover them. We have compared the services offered by several energy consultants to find that the word ‘audit’ is often used out of context and refers to the act of quoting for and comparing gas and electricity contracts, which one might consider being misrepresentation.

The current focus is more on green issues and in the next few years this will become more prevalent, spurred on by government initiatives such as the Carbon Reduction Commitment, which is currently being introduced. The scheme will act as an incentive for businesses to reduce consumption and avoid paying penalty taxes. However, if the suppliers have issues with billing accurately, then the potential for overcharging will be increased, and no amount of smart metering will prevent it if billing systems are not fit for purpose.

To conclude, ‘overcharging’ is not about the unit price you pay. Energy suppliers are actively identifying and overriding problems on their systems, but the same systems are also making random errors. Some of the customer service representatives of your supplier may lack the knowledge to be of service to you. The word ‘audit’ does not necessarily mean the broker advising you will be looking for overcharges. Finally, your carbon footprint may not be as big as your supplier’s data suggests.

Emma Williams
By Emma Williams November 13, 2011 16:45
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