I moved to OVO earlier this year and I'm on the Better Smart Plan, I queried why my direct debit has gone up 50% this month and below is the reply. I understand if I'm using more than the original estimate my DD needs to go up but the response seems to suggest prices can change.
Hi Andrew,
Thanks for getting in touch with us.
You are on a fixed contract but the price is not fixed the unit rate and standing charge is this means that the price can vary due to the energy market at the time and also the usage of energy.
Due to the 54% increase this would be why your DD price has increased to £146.
Surely the whole point of fixing is to prevent price changes? If the unit rate is fixed unless there is a change to tax surely it should stay the same?
I'm not understanding this explanation at all.
Best answer by Jess_OVO
Updated on 22/11/24 by Abby_OVO
Ofgem’s energy price cap limits what you pay for gas or electricity on a variable rate plan. Find out how it works – and how it affects your prices with our price cap guide.
You can also see the latest information regarding the price cap levels and date changes on the Ofgem site here.
I’m so sorry for the confusion there, @Divert2.
Whilst there has been a recent price change on our Simpler Energy plan, this won’t affect our members currently on a fixed plan. As you mention your unit rates and standing charges on this plan are guaranteed for the length of this contract. I’m really sorry for the agent error in advising otherwise.
Whilst the price you pay per unit doesn’t changed on a fixed plan, we’ll still review your monthly payment amount based on any changes to your projected usage figures. This means that if when we review your Direct Debit amount you’ve been using more energy than we’d expected you to, we’ll suggest that you increase the payment amount to ensure that energy costs are being covered. If you’ve recently joined OVO it may be that your actual usage figures are higher than we expected when you first joined. There’s more details on our Direct Debit review process over here:
It might be worth contacting OVO and ask for a longer FIXED TARIFF, as mentioned previously “You pay for what you use”,
I`ve been on a fixed with OVO for 3 1/2 years, ringing them up and ask politely for a better Fixed rate, it`s worked great for me on 2 occasions when in mid-contract with no penalties🙂
I quite agree. And taking fixed price contracts for a 2 year period since 2020 has saved me a lot of money, as the energy price cap levels have increased. More expensive per kWh initially, but a lot less by 4 months into the contract, and from then on to end of contract.
I also got a OVO Fixed during covid that save me £££ and what made it even better was the government fuel payment😃, in March 2024 I was able to take advantage of the AirSource+ (in conjunction with Vaillant) tariff at 15p kwr,that reduced my electric bill even more 😊.
here`s my Tariff rate time line from 2021 - 2025 (electric Only) I live in the east midlands.
Thanks for your post. I can see others have given some helpful advice here, I just want to add:
A fixed plan means that, for the length of the plan (12 months, 15 months etc) your unit rates and standing charges will remain the same. If you’re on the variable plan (Simpler Energy) then the unit rates and standing charges can go up or down in line with the UK Government’s changes to the Variable Price Cap (VPC).
An analogy that helps explain this - imagine you took a fixed plan out at your local petrol station, so every time you go to fill up for one year the price remains at 137.9p per litre. This would mean that, for one year, it would always cost the same amount to fill your car up.
In the real world, petrol prices are variable. One day you might fill up for 137.9p per litre, another day might be 148.9p per litre. The cost of filling your car up can change, as you’re at the mercy of the fuel prices, and this is the same if you’re on the Simpler Energy tariff, however the UK Government will always announce when the prices are going to change, and OVO will aim to give you 30 days’ notice of any price changes before they happen.
If you’re on a fixed plan with OVO, the cost of boiling a full kettle will remain the same for the duration of the tariff. On the Simpler Energy (variable) plan, the cost of boiling the same amount of water in the kettle could be more expensive one month than it was the previous month, if the Government increase the prices.
I hope this helps explain things - basically a fixed tariff means that you could be protected from any VPC price increases for the length of your plan.
This feels like another case of confusion regarding how Fixed Rate Tariffs work. It’s something we’ve discussed here on the Forum quite a lot over the years.
It’s a terrible business decision to offer unlimited energy in the way Tomato Energy is trying for a fixed price, which has gotten them into VERYserious financial trouble which is likely to result in that one collapsing sooner rather than later. It’s unsustainable and unviable as a business model. I could quite literally abuse that to restart the industrial revolution by aggregating power from just a few domestic properties to create a super supply with ridiculous amounts of 3-Phase power capacity available to me.
In a Fixed Rate Tariff, only the rates are fixed, nothing else. You’ll pay more if you use more, and less if you use less.
While I completely agree with your comment on Tomato and it's business model, writing them off as being in "very serious financial trouble" is unjustified. There is no evidence to suggest this. They may, or may not, be in financial trouble.
Ofgem have launched an investigation,
"The opening of an investigation does not imply that Ofgem has made any findings about non-compliance".
More competition in the power market is surely to be welcomed?
Unfortunately… The specific reason given by Ofgem for activating that particular Provisional Order is so rare, that there’s no sign of it ever being used before. Ofgem wouldn’t activate those clauses unless it was serious.
It usually means the death bell has already rung...
