On another thread I’ve been trying to make sense of OVO’s DD Algorithm as recent days have seen my recommended DD payment zooming down and then zooming up again. However one thing that surprised me when I looked at today’s DD recommendation is that is is currently being estimated over the next 12 months. See image below.
Given, like lots of others I’m now a “Simply Energy” customer on a rolling variable tariff, I was surprise - if not a little shocked - to see OVO basing my current DDs on next winters demand for 2 reasons: Firstly how do they know I’ll still be an OVO customer in 6 months time, never mind 12 months time. Secondly, how do they know what energy prices will be from Oct 2023 to Mar 2024 and if they do why are they not offering customers the option to take out fixed term plans at this price (they are offering no fixed rate plans at this time).
Is this “12 months’ time” DD adjustment a new thing or has it just been introduced? I think it must be new as my own forecast balance was previously in line with OVO’s DD forecast and this was based on it being calculated at the end of September 2023.
What do people think?
- Is this some calculated change by OVO in their DD algorithm to boost cashflow this summer from their customers by unreasonably factoring in an obviously much higher demand scenario.
- Or is a reasonable attempt to smooth out their customers winter pricing peaks.
On the basis this is aimed at a largely rolling variable price customer base, who currently have little or no options to shop around in the energy market place, I think it is the former.