Top 5 Utility Billing Issue Root Causes
Bill shock is common in the energy supplier sector, landing the customer with a wildly inaccurate bill can lead to disengagement and even to ombudsman complaints.
Over my career and during our service offering to Energy Suppliers at ClearSky Logic & Database Partners we are regularly working on improving technology to provide better billing functionality and highlight issues with data quality where this can lead to poor billing for customers and bad debt for energy suppliers.
As ever the industry is changing, with the advent of Smart Meters (specifically SMETS 2 …. Not those nasty SMETS 1 meters) some of the most common issues can be avoided however the vast majority of domestic energy supplies in the UK are still on standard meters.
If you do not have a smart meter and fail to provide your energy supplier with regular meter reads then the energy supplier has a couple of options. Estimate the usage based on the reads they do have on the supply, these could be based on previous occupiers usage which could be higher or lower than your usage or worse the supplier defaults to what’s known as an EAC (Estimated Annual Consumption) for electric or AQ (Annual Quantity) for gas.
Incorrect EAC (Estimated Annual Consumption) for electricity or AQ (Annual Quantity) for gas
Due to many energy suppliers reverting to the industry view of the annual energy usage this can lead to severe billing issues where the EAC/AQ has been extremely high. One of the problems here is the difficulty in updating this with the industry can take weeks and relies on the correct integration taking place between the industry and the energy supplier. The result for the end user? Every estimated bill received is significantly higher than actual usage, this forces the customer to provide accurate reads however due to poor engagement it generally ends in a cycle of customers ignoring wildly incorrect bills and the energy supplier assuming the bill is genuine…… Ombudsman complaints aplenty with this type of issue.
Unable to bill one supply
A situation can occur when a customer having both gas and electricity supplies only switches one supply in its entirety. This could be for various reasons some of which could be incorrect data being pulled in via the industry or the previous supplier objecting to the transfer of one of the supplies. The result for the end user is the bills start coming in, the customer if paying by Direct Debit they could run up a big credit balance. Usually at this point the energy supplier realises what’s going on, which leaves them in a difficult situation where the customer is demanding a refund of the credit amount and the energy supplier then struggling to produce a bill which then wipes out the credit balance…. Ultimately leaving a customer in a disengaged state and looking to switch to a new supplier.
Previously this type of issue where the customer is on an incorrect tariff would lead to the customer paying too much, this has become less significant over the past few years as the tariff price cap as removed the hugely expensive tariff rates which were once common in the energy supplier sector. This can still lead to issues which the incorrect tariff, customers should regularly check tariffs to make sure it’s meeting their needs and even switching to a fixed tariff with the same supplier can be a worth while saving.
Incorrect Register Type/Reading
The most common type of meter in the UK has what is called an unrestricted register, the register is the part of the meter which you read and provide that reading back to the energy supplier which is then used for billing. The main problem occurs with what’s called a day night meter, its great in that it allows you to have a tariff of different price depending if its day or night however the complication occurs when the meter is read incorrectly, i.e. the day read is recorded as night and the night read is recorded as day. These are referred to as different registers, this mix up of registers If the read is accepted and mark valid by the industry then it becomes part of your meter read history so will be used in billing, obviously if it’s a completely different register then it throws billing and estimates out the window and needs manually raised and fixed with the energy supplier.
So those are the most common issues I have come across, all can be resolved however the impact can be lessened by being proactive about your data and having the right systems to highlight these issues before they become a problem for the customer. There are many more issues which could affect billing for end users and various complex register / edge case meter setups which drive energy suppliers systems into overdrive and not to mention the old clocked meter issue i.e. meter register reading of 99999 becomes 1 so a massive credit is applied to the customer account but this is much more rare these days and is generally picked up by billing algorithms in most places.