NPower gas 'sculpting'

A question about : NPower gas 'sculpting'

UPDATE MARCH 09

What's this about?

In April 2008, npower changed the way it bills gas customers and miscalculated. After a long drawn out process Ofgem has now ruled it must pay back the overcharge. If you were one of its customers (apart from those on prepay) at the time, you should be getting a refund.

This thread was originally started way before the Ofgem investigation and you can follow its progress.

The Ofgem statement was made on 13 Feb....
OFGEM COMPLETES INVESTIGATION INTO NPOWER TARIFF CHANGES
Ofgem has today (Friday) completed its investigation into Npower's changes to its gas tariffs in 2007. Following the investigation, the company has agreed to put things right and will be making payments totalling Ј1.2 million to some 200,000 customers affected. The regulator was concerned about Npower's approach to notifying its customers of the changes which resulted in financial loss to some households whose consumption was low. A large number of consumers did benefit from the changes.Npower has now pledged to write to existing and past customers adversely affected by the changes in the tariff, so no action by customers should be necessary. If customers still have queries in due course, they should call Npower on 0845 6026363. Following its energy probe last year Ofgem is considering a package of measures which are focused on improving the quality of information available to consumers.What will happen?

npower will contact all customers affected by this problem within about four weeks and issue a refund to their bill. The refunds will, on average, be around Ј6 or Ј10 at the most. If you're no longer an npower customer you should receive a cheque in the post.

Still not happy?

Many in the discussion below are contesting that the payout is not enough; after all the original estimate of payouts was Ј20-Ј30 and some people before Ofgem got involved had far bigger settlements in the small claims court.

If you agree, then there are still things you can do (as well as lobby together with others in this thread).
Complain again to npower. Write to npower and complain again. The Times has a template letter you can use.
Lobby your MP. Get in touch with your local MP and put in a complaint. Find your local MP
Back to the original post

__________________________________________________ _____________

What's this about?

Last April, npower changed the way it bills customers and in doing so is being accused of overcharging. If you were one of its customers (apart from those on prepay) at the time, you may be in line for a rebate of around Ј20-Ј30.

Energywatch has put in a formal complaint to the regulator Ofgem, and the result of that is expected shortly (this post will be updated when it comes in)

Why the ifs and buts

You will note a few 'ifs and buts' in this post, thats because the complexity of the charges is part of the problem... its simply a nightmare. Its because nPower changed its tariffs sturcture that this is so difficult to interpret as it depends on when and where the charging started.

We've consulted some of the comparison companies and below is the score to the best of their and our knowledge, but until Ofgem pronounces surety is tough to come by.

What went wrong?

The price of gas has two different billing rates. The first chunk of KwHs (the unit of gas usage) is more expensive, then after you hit a threshold, each unit is then cheaper.

Yet it seems its possible nPower should've charged the higher rate on the first 4,572 kWhs, it charged it for the first 5,120 kWhs or more, leaving people overcharged by around 4p/unit for 548KwHs or more.

The issue was originally highlighted by Energywatch and referred to Ofgem for investigation. Ofgem is likely to respond to this in the next week or so.

Any updates will be here and a reminder will go in the free, weekly MoneySaving email.

Who does this apply to?

This appears to be a problem that affects npower customers from 2007 apart from pre-payment customers who only have one rate.

A rough rule of thumb to check if you could've been affected is:

If you pay more than Ј20 for gas per month, check your bills!

This is because a little more than that should be enough to have pushed you into the cheaper price band... so its worth checking.

How to work it out

Step 1. Get a copy of last year's bills (from April 2007 to April 2008) and see how many kWh's you were charged in total over the year at the higher rate.

(If you were only a customer for part of the year, you'll need to work it our proportionately.)

2. If it's over 4,572, you could've been overcharged. A typical higher rate is charged at 6-7p/kWhs and a lower rate at around 2p. So for example if you've been billed 5,000 kWHs at the higher rate, it's arguably 428 kWhs too many and you'll be owed around Ј20.

How to get your cash back

This isn't tried and tested, more try and see what happens. First call it up and see if it'll give you a refund.

If this doesn't work write a letter to npower explaining the miscalculation and see if it responds. If this doesn't work refer your complaint to Ofgem.

Though it is possible an easier system could be put in place by Ofgem itself after the complaint.

Please report successes/failures below

ALL UPDATES AS OFGEM INVESTIGATES WILL GO HERE.

What have Ofgem & Energywatch said?

Ofgem: Regarding this issue we have written to npower seeking further information on their charging arrangements. They have until close of business this Wed (14 May) to reply. Following this we will evaluate the response to see what further action may be required.

Energywatch: Energywatch views the issue with seriousness and felt the regulator should be aware of it.

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Best answers:

• My understanding of NPower bills is that you will be charged 4572 units per annum at the higher rate. I notice that I have been charged over 6000 units at this rate.
  I have been told that, yes they 'sculpted' during the winter months but decided to abandon the method during the Summer months. As a result, the 6000+ units at the higher rate is not overcharging!
  Surely this cannot be right!
  Can anyone enlighten me on this?
• The 'sculpting' of the 4572kWh has been well covered on this Forum.
  However I was not aware that they had abandoned this scam practice.
  Are you saying that for next summer they are reverting to charging for primary units pro-rata? e.g. 4572 divided by 12 = 381 units each month?
  If so when does this changeover occur.
  OR
  are you saying that you were charged the 381 units each month last summer?
  Assuming you were a customer before the 'sculpting' tariff was introduced, if you have been charged more that the 4572 units in a 12 month period I would think that you have a case to put to Energywatch
• From Feb 07 to May 07 the charges were 'sculpted'. The next few months should have contained fewer higher units per month at the higher rate.
  However, the next six months were not 'sculpted' and seemed to be set at a flat rate of 4752/12 per month.
  From November, the charges were 'sculpted' again.
  In other words: six 'sculpted' months at 68% of 4752 and six months flat rate at 50%. Although, in my case, I seem to have been charged 83% of the 4752, during the 'sculpted months and 47% during the Summer.
  These figures are approximate, because they did not provide readings for the days on which the rates changed.
• I wasn't aware that they had 'unsculpted' their tariff last summer; although it doesn't surprise me one bit that they would adopt this practice. 'Creative Billing' is a term that comes to mind.
  I think you have an excellent case to put to Energywatch and win a rebate for yourself and all others who may be affected.
• Hey Colonel you have opened a can of worms here!
  I was under the impression that they would play the white man and reduce the number of primary units in the summer (what scampower? never).
  In view of your post I looked at my past years bills and....
  From 6 jan 07 to 26 dec 07 I have been charged for 5905 units at the higher rate .
  Bye the way you have got your figures slightly wrong, it should be 4572 at the higher rate not 4752, that may affect your percentages.
• I haven't checked my bills yet, but what is the best way to go about reclaiming any overcharging.
  Should people go through complaints procedure and then to the official bodies e.g. energywatch?
  Or would it be easier simply to go through the small claims court?
  Why haven't energy watch made a ruling on this and forced through changes?
• I meant 4572, so this mistake did not alter my calculations.
  I have spoken to two operatives, each has said that they either did not understand my complaint or that they were not qualified to deal with it. I have been promised a return call from a senior operative. This has not materialised so far.
  The maths is easy to understand, but they are saying that I have not been overcharged. In other words. in May, they hiked up the 4572 figure without telling anyone. Surely this is wrong.
• These figures that were published on a previous thread, show the kwh per day at the higher rate:
  January - 28.46 kwh
  February- 31.51 kwh
  March - 8.76 kwh
  April - 9.04 kwh
  May - 1.47 kwh
  June - 1.58 kwh
  July - 1.47 kwh
  August - 1.47 kwh
  September-1.52 kwh
  October - 8.75 kwh
  November- 29.41 kwh
  December -28.41 kwh
  The 6 months during which sculpting was suspended, should have been charged at 2.71 kwh per day. I was charged 12.265 per day - around 23p per day too much! I am assuming that this is the case for all Npower customers. How many millions is that?
• From my experience, e-mails have taken ages to get an answer, which was unsatisfactory, to say the least.
  Phone calls have eventually been returned, although I am still awaiting a reply to yesterday's inquiry.
  I have been preparing a detailed spreadsheet analysis of my bill, but nothing makes sense. Does anyone know if The sculpting figures that I am using are correct and whether they applied at the beginning of 2007?
• Colonel, did you email npower using the contact us facility on the website or did you use the complaints one as detailed on the back of the bill
  complaints@npower.com ?
• Colonel, ask them to dispute your account and make a complaint to them. They have a system called ONCE complaints which means any complaint you have goes to the specialised dept. This seems more appropriate in your case.
  Strange though, I only heard seasonal weighting came in late last year with them. When did it come in then? I may be thinking of regional pricing.
  I'm wondering if they have just cobbled up your bill? Did you have any bill amendments or replacements bills? If so, I wonder if someone has sent you an incorrect adjustment of some kind?
  If they have overcharged this way, then they cannot hold back a refund due to an internal policy change.
• I have a similar problem as Colonelhall, however I'm lucky to only have been charged for around 5700 units at the higher rate this year.
  I don't have a problem with the concept of gas sculpting (although it is underhand) as long as they stick to the terms of the contract presented to me (4.5k ish per year at the higher rate).
  My story is that I queries this a month ago, was told that the bill was wrong and to expect communication from the specialist department. When I received the red reminder bill a fortnight later I called to prompt them to be told 'we restart the count of units at the higher rate every time we change our prices.' When I queried whether the two price changes in the last year meant that they could restart the count twice this was confirmed. I asked for written confirmation of this (thinking energy watch complaint) and was told to expect something shortly. A week later I rang to ask where my confirmation was, only to be told that the previous communication was incorrect and to expect contact within 72 hours from the specialist department.
  Today I received a letter from a debt collection agency, and on ringing Npower was told that the previous communication was wrong, the previous previous communication was correct and the bill stands, but the specialist team have me on their backlog and will get to me eventually, but whatever decision is reached I have to pay this bill. Not only this but they're unable to send me a letter confirming this or show me where in their terms and conditions this is stated.
  I'm now looking for a supplier with a standing charge contract.
• This is outrageous. I have yet to receive my reply from the specialist team, in spite of being assured three times that I would.
  If you are receiving gas, have looked up charges and been told that the higher rate is 4752 at the beginning of the year and had that figure confirmed at the end of the year, how can they say that it has changed?
  I am sorry to see that they are not inclined to give written confirmation of their policy regarding this, as I was going to ask for just that!
  I will certainly be taking this to the complaints procedure and have no intention of letting it drop. However, I need this written confirmation to refer to.
  If this is indeed their policy, then it is the same for everyone and we have all been overcharged!
  I think that every customer of Npower needs to know what is going on and that they need to do something about it.
• 'we restart the count of units at the higher rate every time we change our prices.'
  If this is the case and this 'restart' took place in May. Were we informed of it? This looks like a price-hike with no announcement, to me. Can anyone tell me of a business that sends you a bill that includes a change of price that was not agreed upon. For instance, if you had a savings account at 5% ni interest and at the end of the year was told, we decided to drop it to 2% but didn't feel the need to tell you, would this be acceptable?
• Is this 'sculpting' still being applied? I am looking to change to N power for gas, but am concerned about this. I can't find any info regarding this on their website!
  Also if it is still being applied, would it be worthwhile looking to change suppliers again before next winter, thus taking advantage of the lower amount of higher priced units that are charged during the summer?
  What does anyone think?
• Colonel, you are right to await something in writing on this.
  I can definately tell you that Npower have never restarted the annual allocation on elec. Every price rise they introduced (and any amendment to previous bills) was calculated using a full years period in date terms. They were then working out bills through various price rises over this period when reproducing any bills for customers.
  So, I would find it hard to believe they do it on gas. It's such an easy scam to expose.
  They actually bill both in the same systems thesedays despite what companies they used to be prior to migrations.
  Since the letter never arrived it makes me believe Nearly was told porkies by their call centre.
  I know their current billing system is garbage (they are awaiting going into another one now!) so I wonder if the latest system does this so previous billing on gas has always been ok but the new system is scamming us all???