# Bord Gais 'budgeting' offer for electricity customers: +20% initial tolerance uplift.



## hastalavista (18 Aug 2011)

This is for info rather than debate

Took a call from BG this afternoon where they offered to bill me monthly for the next year with an amount equal to 1/12 of my last 12 month spend on elec.

They said that the amount would be the same for the 12 months and that any plus or minus adjustment would be made at the end, this to include any energy price increases in the intervening 12 months.

They also said that it was not a contract for a year so if you wanted to revert back to bimonthly billing at any time no problem.

On the plus side the 12 equal payments seems attractive.

On the neg side if prices go up the overhang could be an issue.

As I said, just for info


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## Guest105 (18 Aug 2011)

Are they having a cash flow problem or what


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## Mrs Vimes (18 Aug 2011)

I got a leaflet about this with my elec bill last week.

Watch out for the small print:
"Will I pay the same as last year?"
  Your monthly payment amount is based on your most recent consumption,  your previous year's consumption and energy prices (divided by 12). An  initial tolerance (*typically 20%*) is added for variations in your usage. This  allowance is made to ensure you do not get into debt and your bills are  always covered so no lump sum is required to be paid by you. We carry  out a reconciliation once per year. If you are in credit by more than  €200 then you can claim a refund. If the amount is smaller than this  then we will carry the amount forward to reduce your monthly payments  for the next year. You don't pay anything extra for your electricity by  using this payment method.

I feel making you overpay by 20% (after including price rises) to ensure you don't get into arrears is ridiculously cautious and would do a lot more for their cashflow than for yours.

Sybil


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## hastalavista (18 Aug 2011)

Thanks a lot for that post, as none of that was mentioned to me on the fone I will take it up with the regulator, it was a real hard sell and she was miffed when I said no.

This is the email for the complaint
energycustomers@cer.ie


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## wbbs (18 Aug 2011)

Got the same call yesterday and it was a real hard sell, I didn't want it, am well able to budget for it myself but she wasn't happy with that answer.   Very pushy.


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## bluemac (18 Aug 2011)

I like paying monthly but i did question how they got to 2300 when i recon it was 1970  I guess that was the extra 20%  but no they did not say it to me either.


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## theresa1 (18 Aug 2011)

Flogas for your Gas and ESB Electric Ireland for your Electricity. Stay away from Bord Gais Energy.


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## Guest105 (19 Aug 2011)

theresa1 said:


> Flogas for your Gas and ESB Electric Ireland for your Electricity. Stay away from Bord Gais Energy.



I want to leave Bord Gais, what do I have to do to go back to ESB Electric Ireland?  They told me when I signed up that they would always remain competitive with ESB now we know that is not the case


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## serotoninsid (19 Aug 2011)

Don't mean to hijack this thread but just wondered if folks think its worthwhile moving electricity supplier right now.  In the light of Airtricity increasing their rates, I was considering moving to Electric Ireland - but then someone told me they are expected to 'lift' their prices shortly also.  Is this the case?


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## hastalavista (19 Aug 2011)

*Response from Energy regulator*

From CER.ie
Dear 'Hasta',

I am writing with regards to your complaint against Bord Gais Energy which you forwarded to the Energy Customers Team.

The CER has a role to play in assisting you when you have difficulties dealing with your supplier or network operator. However, before we can help you with your complaint you must first contact your supplier or network operator and complete their full complaints handling process. This gives them an opportunity to resolve your complaint directly.

Under  S.I. 452 of 2004 the Commission may only assist with unresolved complaints. Once you have completed the complaints process if you do not believe that your complaint has been adequately considered please feel free to contact us in relation to this again.  Please note that the Bord Gais Energy process includes escalating your complaint to the Customer Care Manager if you are not satisfied with the response you have received through the general contact points for customers.  You may contact the Customer Care Manager in the following ways:

Bord Gais Energy
P.O. Box 10943
Dublin 1

or

Email info@bordgais.ie

Yours sincerely,

Paul Byrne

Energy Customers Team


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## newirishman (19 Aug 2011)

Paying in (bi-)monthly installments would be standard practice in many continental European countries. It makes it easier for individual budgeting as you are paying the same every month (or two month), so don't have the problem with having a say 400 euro gas bill for dec/jan and 40 euro in aug.
If course, there is the risk that you are underestimating your usage and end up with quite some addtional payment at the end of the period.
From an provider point of view it is clear as well - cash flow is more even over the year, you only have to get meter readings once a year, etc.
BordGais called me as well for the same - I refused the offer as I can budget for myself. 
I don't however understand why one would complain about this? If you continue paying real usage on a bi-monthly basis than that's fine. If you prefer more regular payments (which might make it easier for many) than it is a very positive to have the choice. All in all I do welcome this option.


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## Leo (19 Aug 2011)

newirishman said:


> I don't however understand why one would complain about this?


 
Main reason I see is that they over-charge by 20%, if they end up owing you over €200, you can 'apply' to get your money back! They should do that automatically.

If prices do rise as well, you may end up paying the higher rates for units you used before the rate hike came into effect. Conversely, you might gain if energy prices drop, but we all know which is more likely.
Leo


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## hastalavista (19 Aug 2011)

newirishman said:


> I don't however understand why one would complain about this?



The complaint is not about the idea, it is about the fact that the 20% markup was never mentioned on the fone and neither was the 'we keep anything less than 200 for off set against next year'  This makes it harder to move accounts.

I think that is clear from a full reading of the thread


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## newirishman (19 Aug 2011)

hastalavista said:


> The complaint is not about the idea, it is about the fact that the 20% markup was never mentioned on the fone and neither was the 'we keep anything less than 200 for off set against next year'  This makes it harder to move accounts.
> 
> I think that is clear from a full reading of the thread



Sorry missed that - I was informed about this over the phone when they called me.


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## hastalavista (19 Aug 2011)

newirishman said:


> Sorry missed that - I was informed about this over the phone when they called me.



No harm done! I got none of that plus  she was very pushy and peeved when I said no. I agree with the idea but we have had enough mis-selling....


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## acfunduro (23 Aug 2011)

*Another choice*

I for one think that this is just another choice for people to make. I agree that they should be more upfront on the 20% uplift they apply but for some it takes the stress out of the bill arriving, especially if it's after a cold Christmas period. It levels the payment and from an accounting perspective that has its pluses. It may not be for all though.

On our pre marriage course 7 years ago, the guy from the credit union told us that this type of levelling is very good practice in his experience. We did it with the electricity at the time and have been doing it since. Some times we are in debit other times in credit but we know every month (we pay monthly to make cashflow easier) what the amount is. It's the same with the mortgage or rent so why not with a utility bill?

AC


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## Leo (23 Aug 2011)

You don't need to enter an agreement, particularly one where they'll overcharge you, and only let you take back what's yours if it's in excess of €200. 

There's nothing to stop you over-paying during the summer months to protect yourself against bigger bills in the winter. Going down that route leaves you firmly in control. You could even overpay enough so that you are in sufficient credit to cover the bill around Christmas if that is an expensive time.
Leo


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## hastalavista (27 Aug 2011)

Leo said:


> ...
> 
> There's nothing to stop you over-paying during the summer months to protect yourself against bigger bills in the winter. Going down that route leaves you firmly in control. You could even overpay enough so that you are in sufficient credit to cover the bill around Christmas if that is an expensive time.
> Leo



Interesting idea, just looking at the practical side for a moment, particularly if advising 'clients'

Assume standard bill is on DD and the bi monthly is currently c 200 each time.

So if you top up between bills then the subsequent  DD bill will be reduced by the top up so back to square one.

The trick is how to get 'ahead?


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## Leo (29 Aug 2011)

hastalavista said:


> Interesting idea, just looking at the practical side for a moment, particularly if advising 'clients'
> 
> Assume standard bill is on DD and the bi monthly is currently c 200 each time.
> 
> ...


 
If someone is on DD or not shouldn't really make a difference. Once you overpay to the point where you are in credit, they will just issue you with a bill to state the amount you are in credit, no DD taken or payment required. 

Simply continue to over-pay and you will build up that level of credit. Every two months, usage and standing charges get deducted from the total. Then, during winter when usage rises, the bills may catch up with or exceed the regular payment amount, but the credit built up should mean you don't end up with excessive bills. 

In your exaple, let's assume that 200 is the average bill over the year, perhaps summer bills might be as low as 100, winter ones as high as 300. If someone starts paying in this method during the summer period, when usage is low. The table below plays this out over the 6 billing periods. First column shows the usage (including all charges) during that period, next the bill issued that period and, next the regular 200 payment, lastly, the balance remaining after the payment. 



Usage|Bill|Payment|Balance
100|100|200|100
150|50|200|150
175|25|200|175
225|50|200|150
250|100|200|100
300|200|200|0
 
Leo


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## hastalavista (29 Aug 2011)

The DD will be driven by the utility billing system, so for your model to work u need a consumer-set up standing order.
Nice one, thanks


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## Leo (29 Aug 2011)

hastalavista said:


> The DD will be driven by the utility billing system, so for your model to work u need a consumer-set up standing order.
> Nice one, thanks


 
That's true. If a DD is already in place, the utilities will be reluctant to move off that, so a consumer could pay the balance of the 200 into the account themselves once they know what the DD amount is.
Leo


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## hastalavista (29 Aug 2011)

Many of the utilities will not give the sign on discount without a DD, and in the case of ESB online billing


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