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# Direct debit calculator, how does it get its estimates?

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If the direct debit calculator uses available data from my smart meter and my previous years usage to estimate my future direct debit amount, and uses, as has been said the current prices for gas and electric, which will therefore be the same for both years, please could someone explain this:

Using total bill prices for combined electric hi+low rate/gas/standing charge/VAT

Direct debit calc estimate for 2023             Actual cost in 2022         Percentage difference

October        £225                                                           £139                                    approx +60%

November    £277                                                          £173                                   approx +60%

December    £319                                                          £231                                     approx +38%

The pattern is similar for other months, there is no standard to the percentage guess of the increase, but it is always considerably higher. Why would OVO be assuming I will use 40% to 60% more energy next year? This direct debit calculator is pushing my balance up, a near 300% increase in my balance with OVO in 2022, and is trying to extract ever increasing direct debit amounts based on it’s calculations.

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Best answer by Firedog 11 January 2023, 01:10

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Userlevel 7
+2

could you do the same calculation but using kWh instead of £ ? Also the dd uses your Future Annual consumption figure as shown in your online account viewed via a browser not the app (still don’t know why it’s not in the app btw) Look under Plan Details

Having said which, I don’t know how the future annual consumption figure deals with high/low rate amounts??

Userlevel 7

The DD calculation itself is quite simple:

• A = Annual consumption in kWh × current price in £/kWh as shown on your plan (worked out separately for each tariff rate)
• B = 365 × Standing charges in £/day
• C = VAT, (A + B) × 0.05
• D = Expected cost, A + B + C
• E = Current balance
• If E is in credit, suggested DD is (D - E) / 12
• If E is  in debit, suggested DD is (D + E) / 12

This basic calculation gives a DD that would run your balance down to zero in a year’s time at current prices. This may not be wise, and you’d probably be nagged to increase it in a few months’ time, especially if prices rise again. It would be better to use the calculator to find a figure that would leave you with a couple of months’ credit at the end of the year, to avoid a sudden unexpected outlay.

Does this give a very different picture from the one you’re seeing?

Julia, Firedog

thanks for the support. I’ll do some more detailed stuff and those images when i’m off work.

But very quickly, future annual use figures from plan = 4551kWh elec, 7674kWh gas, total of 12,225 kWh

From 2022 yearly use, total 11,238 kWh, so a projected increase use of 987 kWh for this year if I understand correctly?

Also, the standard variable plan doesn't do a 12 month projection to zero, it rolls over, which I believe also skews the calculation results.

Userlevel 7
+2

Julia, Firedog

thanks for the support. I’ll do some more detailed stuff and those images when i’m off work.

But very quickly, future annual use figures from plan = 4551kWh elec, 7674kWh gas, total of 12,225 kWh

From 2022 yearly use, total 11,238 kWh, so a projected increase use of 987 kWh for this year if I understand correctly?

Also, the standard variable plan doesn't do a 12 month projection to zero, it rolls over, which I believe also skews the calculation results.

The Future Annual Consumption figure actually looks at your actual usage over a bit more than a year if you have been with OVO more than a year.

Then it makes an estimate for 12 months usage.

It does this to attempt to smooth out any anomalies in your usage pattern. It is not perfect, but isn't too bad for me. The alternative would be for OVO to use  exactly your usage over the last 12 months but that isn't how the system is designed. So that is why your Future Annual Consumption does not equate to exactly your actual consumption. The figures will never be the same. Mine also aren't the same.

The Future Annual Consumption figure has taken some time to settle down for many ex SSE customers who migrated.

Not surprisingly, I do find the Future Annual Consumption figures varies when there is a long cold snap or a long holiday, otherwise changes are smaller once it has settled down.

Userlevel 7
+2

Julia, Firedog

thanks for the support. I’ll do some more detailed stuff and those images when i’m off work.

But very quickly, future annual use figures from plan = 4551kWh elec, 7674kWh gas, total of 12,225 kWh

From 2022 yearly use, total 11,238 kWh, so a projected increase use of 987 kWh for this year if I understand correctly?

Also, the standard variable plan doesn't do a 12 month projection to zero, it rolls over, which I believe also skews the calculation results.

It is a moving 12 month projection to zero on the SVR.

So today if i set my DD to £80 in 12 months time the DD calculator says i will have a zero balance.

But… obviously rates may increase and also if i only pay £80 a month gradually my current positive balance (I keep a larger balance as i have been with ovo for some time so get paid interest) will run down... so my recommended direct debit will go up over time simply due to my positive credit balance running down

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Userlevel 7

Welcome to the OVO Online Community,

I can see that other community members have already given some great advice here. Just wanted to add we have some great guides on these topics:

Hope this helps.

Userlevel 7

The Future Annual Consumption figure actually looks at your actual usage over a bit more than a year if you have been with OVO more than a year.

@Jeffus  Sorry to pester you, but do you know or have you worked out how long ‘a bit more than a year’ is? Before this thread was started, I’d been doing a few calculations to try and find out where the FAC figure on my plan page comes from. I can get quite close, but I’ve failed to match it exactly. Looking a bit deeper, I see that it’s in fact calculated to at least one decimal place. I’ve noticed that it isn’t calculated daily, but updated at intervals - perhaps weekly. I just ran through the figures again, trying to hit today’s figure, 2163.9. I tried a few models, including:

 Consumption for 2022 (365 days to 31-12-2022) 2158.4 Consumption for latest 365 days to 08-01-2023 2157.2 Consumption for the 400* days to 08-01-2023 ✕ 365/400 2127.4 Consumption for the 400* days to 31-12-2023 ✕ 365/400 2216.7

OK, the difference from OVO’s figure isn’t alarming - but it might be for someone with much higher consumption, e.g. Ofgen’s ‘average household’.  Can you help me reach the target?

*  400 days is the extent of stored smart meter readings, available on the web. I could use a longer period by referring to bills back to 2016 (when I became an OVO customer), but I think that would be stretching ‘a bit more than a year’ just a bit too far 🙂

PS on my Renewal page, I see :

### Here's your past year in review:

...

Electricity you used: 2062 kWh

I haven’t bothered to try and work out where that comes from, because as far as I can see, it isn’t used anywhere else.

Userlevel 7
+2

The Future Annual Consumption figure actually looks at your actual usage over a bit more than a year if you have been with OVO more than a year.

@Jeffus  Sorry to pester you, but do you know or have you worked out how long ‘a bit more than a year’ is? Before this thread was started, I’d been doing a few calculations to try and find out where the FAC figure on my plan page comes from. I can get quite close, but I’ve failed to match it exactly. Looking a bit deeper, I see that it’s in fact calculated to at least one decimal place. I’ve noticed that it isn’t calculated daily, but updated at intervals - perhaps weekly. I just ran through the figures again, trying to hit today’s figure, 2163.9. I tried a few models, including:

 Consumption for 2022 (365 days to 31-12-2022) 2158.4 Consumption for latest 365 days to 08-01-2023 2157.2 Consumption for the 400* days to 08-01-2023 ✕ 365/400 2127.4 Consumption for the 400* days to 31-12-2023 ✕ 365/400 2216.7

OK, the difference from OVO’s figure isn’t alarming - but it might be for someone with much higher consumption, e.g. Ofgen’s ‘average household’.  Can you help me reach the target?

*  400 days is the extent of stored smart meter readings, available on the web. I could use a longer period by referring to bills back to 2016 (when I became an OVO customer), but I think that would be stretching ‘a bit more than a year’ just a bit too far 🙂

PS on my Renewal page, I see :

### Here's your past year in review:

...

Electricity you used: 2062 kWh

I haven’t bothered to try and work out where that comes from, because as far as I can see, it isn’t used anywhere else.

@Firedog good questions, the figure on the top of the renewal page is exactly 12 months, but the actual renewal quote on the same page uses the Future Annual Consumption. At least for me.

As for the exact algorithm the billing platform uses for the Future Annual Consumption , i have never asked. I don't know how complicated the formula is, i, suspect it is impossible to guess. It has never bothered me as i i know over time i only pay for the electricity and gas we use. Our energy use is rather variable being away from home quite a bit, i very much doubt it could be made better for me at least,

It seems difficult to get a straight answer to the question of how the DD calculator works, here is an OVO reply to my complaint about my balance rising excessively and OVO still wanting to increase my direct debit, seems to be a standard ‘cut and paste’ answer lacking in detail to me:

Thanks for getting in touch with us. My name is Ami. I'm a account management agent here at OVO, and I'm happy to help you with this.

I have tries to call you today, however I could not get through to you. I can see your current direct debit is £175. Direct debit adjustment are made by reviewing members gas and electric consumption over the previous year and also any rises that will take place over this year. This higher price level is planned to last to the end of March 2024. However, it will still mean average prices increased by 27% in October 2022 and a further 20% in April 2023.You direct debit is not only estimated on the energy you use but also the rises that will take place over the next year.

We now show an update of your balance daily in your online account (instead of just at the end of the month like before). This way, you can see exactly how much energy you're using and how much it's costing you, nearly in real time. It's all thanks to the readings your smart meter sends us.

We hope it's a useful feature to have. It should help if you're looking to make small changes around the house that can save you money and energy.

And no worries: you'll keep paying your bills <monthly/every 3 months>, just as usual. Want to see your previous bills?

Want to see your previous bills?

If you have any questions, the fastest way to contact us is via our online chat (Mon-Fri 8am-6pm, Sat 9am-1pm). You can also check out our Help Centre or give us a call on 0330 303 5063 (Mon-Fri 9am-5pm Sat-Sun 9am-2pm). We’re here to help.

Userlevel 7

Jeffus wrote:

...

OK, thanks. It remains a mystery for the time being, unless @Tim_OVO or someone decides to let us in on the secret.

Meanwhile, thanks for pointing me in what I think is the right direction for the origin of the figure at the top of the renewal page. I found that, using today’s figures from the ‘Year’ usage page, the calculation seems to be:

Last full year (currently Jan-Dec 2022) 2158.35 + Jan 2023 to date 55.40 - Jan 2022 145.15 = 2068.60

… which is quoted as 2069, a little bit different from what was showing yesterday.

Userlevel 7

The direct debit calculator on the Online Account will let you know exactly how it’s worked out. This example might help, the first figure is based on your unit rates X EAC + standing charge:

Welcome to the OVO Online Community,

I can see that other community members have already given some great advice here. Just wanted to add we have some great guides on these topics:

Hope this helps.

Emmanuelle

Where exactly is this calculator, I can find the (inaccurate!) direct debit calculator, but nothing like the example you show above?

But that said, where and what sets the ‘predicted costs’ used in the calculation in the first place?

One of my gripes is the estimations in the first place, smart meters did away with estimated bills, so now we have moved on to estimated direct debits, which just like the estimated bills were, always seem to be overinflated:

Userlevel 7
+2

I have a complaint ! I’ve just been looking for the Direct Debit Calculator and pressed the ‘Reduce my next three payments’ button - It would have been nice to be asked Are You Sure ? No I’m not, but it’s too late - I have indeed reduced my next three payments 🙄

I also can’t find a calculation like Emmanuelle’s example btw.

Userlevel 7

The estimated annual consumption is based on your usage and meter readings:

*The EAC is calculated using the historical readings submitted for your home (which might cover the time before you moved in). As your EAC is re-calculated each time we share your meter readings with the energy industry, the more readings you submit, the more accurate this figure will become.*

The calculation above is how we work out what a customers direct debit should be.

The direct debit calculator on the Online Account gives a visual representation of the projected outcome of any direct debit changes.

What aspect of the direct debit calculation do you feel is incorrect on your account @gwadrian?  When you put your figures into the equation I shared above do you get the same results as OVO?

@juliamc that is very frustrating! Are you not able to increase it again?

Userlevel 7
+2

Yes I did increase it again, but it wouldn’t let me set it to what I’d had it at before. I’m coming to the end of my fixed term so the recommended was £5 per month. I was paying £200 per month as I want to keep a decent balance in there.

Having set it down to £5 with just one click (No I wasn’t Sure), I immediately got the email to say thanks we’ve reduced your amount etc.

Tried to set it back to £200 but got error to say Can’t set it back to your previous amount (Why on earth not?), so set it to £220, which is probably nearer what I’ll need to pay once I’m on the EPG rate.

“What aspect of the direct debit calculation do you feel is incorrect on your account @gwadrian?  When you put your figures into the equation I shared above do you get the same results as OVO? “

My direct debit calculation from OVO is just too high, my balance  is increasing exponentially which is ridiculous:

Feb 22 +£117, March 22 +£123, April 22 +£140, May 22 +£164, June 22 +£193, July 22 +£211, Aug 22 +£244. Sept 22 +£290, Oct 22 +£386, Nov 22 +£446,  Dec 22 +£519, now at Jan 23 it will be about +£675 by the end of the month, and still OVO wants to increase my debit now by another £10 a month, at this rate I’ll be a years payment in front, so yes, the direct direct debit calculation is incorrect.

Also yes I do have a smart meter since 2017 and we’ve been in the house 23 years so OVO  should have a good idea of usage by now. In the winter months my pot of money in the OVO account should be falling as I use more energy than my direct debit covers, which has been built up during last summer, and will then recover again next summer. My balance is increasing even during winter? The OVO direct debit calculator only gives a costing, not figures for kWh usage prediction for each month up to Jan 2024 at present so it’s hard to know what the estimate is based on in usage terms, but at present the December 2023 cost estimate is £320, my December 2022 actual cost was £175, December 2021 was £122, prices have and are rising, but not by that amount.

Userlevel 7

Emmanuelle

Where exactly is this calculator, I can find the (inaccurate!) direct debit calculator, but nothing like the example you show above?

It’s not a calculator, it just shows how the DD figure was arrived at. To see it, on the Direct Debit calculator page, click the   Change Direct Debit amount   button, then on How is my minimum payment calculated?

If you add your current balance to the figure shown for Estimated costs, you’ll get what they expect you to spend for the next 12 months.

Firedog,

Right, that was useful, thank you, I had not found that before. How now can I find HOW they arrive at the Estimated costs figure in usage terms? Is that the Future Annual Consumption?

Many thanks for the support!

Also is there an easy way to find my total electric and gas kWh usage figures for last year Jan 2022 to Dec 2022 anywhere without having to add up each month?

The top line sums made simpler as in the example Emmanuelle shows in this thread is not there on mine? Do I need to add my current balance to this figure then? That would make my estimated costs for 12 months just under £3000, which if you consider my last 12 months was around £1200, including being on SVR for 5 months, if we said we have 1 increase of 27% (£1524) then another of 20% to cover future increases (£1828), that leaves the 12 month usage estimate about £1000 too high, now that would explain why my balance is being forced ever upward by ever increasing direct debits.

I’m finding more details using some of the posts here which is good.

So, my past year in review, electric 3716kWh, future estimated annual figure 4551kWh (+835kWh) and gas 6602kWh, future estimated figure 7613kWh (+1011kWh) so OVO are saying I will use over 20% more energy in a year where costs are rising and everybody is cutting their usage as much as possible? Please explain?

Userlevel 7

Sorry for the issues you’re having,

If you think your estimated annual consumption (EAC) is incorrect you can contact our Support Team who will put your account on a 3 month direct debit review suspension. In that time, we will get lots of meter readings from you which will adjust the EAC to a more accurate figure. You can work out your actual EAC by taking your most recent reading away from a reading a year ago. Remember with gas you’ll need to convert this into kWhs.

Usually an EAC is out of line due to a read dispute or incorrect figures given by an old supplier or the industry. But you don’t mention switching suppliers, so that is unusual.

Hope this helps.

Userlevel 7

… my past year in review, electric 3716kWh, future estimated annual figure 4551kWh (+835kWh) and gas 6602kWh, future estimated figure 7613kWh (+1011kWh)

Just to point out that the Past year in review figures at the top of the Renewal page are not really to be relied on for calculation. As far as I’ve been able to work out, they are derived from those on your Usage pages. To arrive at the figures shown, take the corresponding figure for the year 2022, subtract the figure for January 2022 and add the figure for January 2023 (to date). In other words, they’ll only be vaguely accurate at the end of a month.

It’s likely that the future estimated consumption, assuming you have a working smart meter, is simply the difference between the readings for 1 Jan 2022 and 1 Jan 2023. You will also see these figures on the Usage page for last year. This will of course not take into account any measures you may have taken during the year to reduce your consumption. Can you show that the figures you see are different from those for the whole year 2022?

The costs are calculated using current rates, so if you were paying at lower rates for seven months last year, the projected cost used to set the DD will of course be higher than you were charged for 2022.

I’m going to try the support team route in all honesty, i’ll get back when I have some more updates.

Many thanks to all the help everyone is trying to give. Looking through other posts and at what is happening in media and consumer reports, inaccurate direct debit future estimates and excessive credit balances seem to be VERY common among ALL energy suppliers, so I’m not just singling out OVO here. There also appears to be no desire for suppliers to correct this as I suspect many many millions of pounds would not then be in customers accounts to help “cash flow”.