THOUSANDS of customers are being urged to check their energy bill direct debit.
Ofgem, the energy regulator, has warned firms that some customers aren’t paying enough.
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It could mean that some customers see their bills hiked in the autumn when the price cap rises again and households use more energy through the colder months.
The regulator has slammed firms over bill hikes and warned they must review customers’ direct debits after half a million energy customers saw their bills go up by 100% or more.
Now it’s revealed that some Octopus energy customers haven’t been charged enough.
According to a letter sent by Ofgem to Octopus Energy: “Over half of Octopus energy customers have a direct debit level that is more than 25% lower than expected usage.”
Ofgem said the findings indicate that these customers may face hefty bill hikes in the coming weeks to make up for significant debit balances.
The figures are from a review and reflect the situation three months ago.
Octopus energy said currently around 20% of its customers are being undercharged, but it said it was unlikely any were at risk of a shock bill.
According to the firm, the majority of those that are undercharged have credit balances (meaning they have paid for more energy than they have used).
A minority are on arranged payment plans.
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But it’s vital to check your direct debits frequently to check you aren’t being over or undercharged to help avert facing a bill shock.
How is my direct debit usually calculated?
Usually firms take the unit rate of the energy tariff you have, and multiply it by how much energy you are “expected” to use over a year – using your energy meter data.
This is called an estimate. But if you are on a smart meter or give regular meter readings, then you bill should be based on your actual usage.
Your energy meter should document exactly how much you use, and then your daily standing charge is added on top.
The total figure here is then divided by 12 to get your monthly bill.
Many households find they are in credit during the summer months when people typically use less energy because the heating is turned off – but your monthly bill will stay the same so you don’t pay a bigger bill over the winter.
How do I check my direct debit is right?
Check your usage against what you’re being charged to make sure you’re not forking out more than you should be for energy.
If you’re coming off a cheap fix and rolling on to a standard tariff, you could be paying double thanks to the recent price cap rise.
So if you see a similar increase to your payment, it’s not necessarily cause for concern.
And, if you’re paying less than you think you should be take it up with your energy firm.
Octopus energy has a handy balance forecaster which helps give you an estimate cost for your future bills based on your usage and the unit rate.
