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Sudden price increase in our 2 year fix plan

  • 23 April 2018
  • 6 replies
  • 1667 views

We renewed our OVO energy contract just 2 months ago to the 2 yr fixed price plan. Having been customers of OVO for several years they had lots of info on our energy consumption. Their offer of a two year fix at £118 per month seemed too good to be true since we had been paying £140per month. I queried the amount several times when we signed up but was assured that £118 would cover our costs. Today, just two months into our contract we have been advised to increase our monthly payment to £128. Whilst we have probably used more gas in the last 2 months than last year due to the cold winter, it seems incredibly quick to make us start to pay more. A good summer could soon reduce our gas bills! I fear it's as we thought - a low offer to tempt us to renew our contract and then bump up our monthly payment.

Has this happened to anyone else? And how did you deal with it? Sit it out hoping your consumption would even out over the year, or increase your payments?
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Best answer by Transparent 23 April 2018, 18:12

Hi @Llandaffian... first posting, I notice! :)

I believe there's no connection between the original offer at £118 and the request to raise the monthly payments. These are assessed by quite different formulae.

I think you're absolutely right to highlight the cold weather spell as the likely culprit. Since this occurred almost as soon as your new contract started, it would be bound to have a large influence on the forward usage prediction.

Two months is actually a very good time for OVO to reassess the payments. The usual complaint I see here is when the request to increase the Direct Debit occurs after the contract is already six months old (or more). In those cases the increase is proportionally higher because it also has to cover 6 months+ of backlog.

I suggest you increase the payments as requested. From reading what others have posted on the Forum, the Usage Prediction algorithm is pretty fair. If we end up with a stunningly warm Indian Summer/Autumn, then no doubt you can lower it again for the final few months. :)

**Updated 24/07/2019**
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Userlevel 7
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Hi @Llandaffian... first posting, I notice! :)

I believe there's no connection between the original offer at £118 and the request to raise the monthly payments. These are assessed by quite different formulae.

I think you're absolutely right to highlight the cold weather spell as the likely culprit. Since this occurred almost as soon as your new contract started, it would be bound to have a large influence on the forward usage prediction.

Two months is actually a very good time for OVO to reassess the payments. The usual complaint I see here is when the request to increase the Direct Debit occurs after the contract is already six months old (or more). In those cases the increase is proportionally higher because it also has to cover 6 months+ of backlog.

I suggest you increase the payments as requested. From reading what others have posted on the Forum, the Usage Prediction algorithm is pretty fair. If we end up with a stunningly warm Indian Summer/Autumn, then no doubt you can lower it again for the final few months. :)

**Updated 24/07/2019**
Thanks. Still feel slightly miffed since OVO continue to forecast our annual costs as 12 X £118! Think I'll let it run a bit and see what happens.
The odd thing is that the predicted monthly price you are shown when being offered a fixed price tariff is the cost for a typical 'medium user' household - your actual historical usage data is not used. So, if you're actually a slightly heavier or lighter user this is not taken into account. It's a bit of a hassle but I always look at my previous year's consumption and do a monthly cost calculation based on the new tariff and the historical usage, and set my direct debit at around that level.

I find it odd that with all the historical usage data Ovo has for me, the estimated monthly cost figure is not personalised to me. I don't find their method of calculating my estimated usage costs very helpful, but I guess the methodology is set by Ofgem perhaps? If they have my data, I don't see why they couldn't also show me a figure alongside the estimated one, based on my actual previous year's usage - this would be very helpful to me.
My direct debit has recently increased, but the amount of energy in 2019 was lower than in 2018. This cannot be due to an increase in energy prices as I have 2 year fix.
Userlevel 5
I've moved your query over here, @100425629, take a look at the best answer for more help with this.
Userlevel 7
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Hi @100425629. The Direct Debit calculator page is the place to check the figures. If the calculator does indeed show that the assessment is markedly wrong, then contact Customer Support.

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