Thursday, 5 January 2012

Utility Company Holding On To My Money

The behaviour of utility companies has been a perennial concern of mine, prompted when the deign to send me a bill:  The constantly rising prices are well known to everyone in the UK and cause real difficulty for millions of people, even when we are having an incredibly mild winter like we are at present.  It is ironic that global warming may be sparing the lives of thousands of British elderly people.  Utility prices rise whenever there is some crisis that increases the cost of gas and oil and that they do not decrease when these costs fall; our monthly combined gas and electricity is now equal to what our quarterly bill was in 2008.  In addition it is clear that the six power utility companies are running a cartel unchallenged by anyone.  All their prices rise by approximately the same amount at the same time of the year with an increase of around 20% in 2011, well above the increase in pay and even general inflation.

What I am focusing on today is not simply the rising prices, but in particular the way customers are treated.  There now seems to be an accepted way that service providers feel they can treat you.  They are not compelled any longer to even provide a service for what you pay them let alone one which is timely and efficient.  This applies to things like telecommunications and rental property as well as other utilities.  If you are disgruntled with them, you find it difficult to break a contract that they insisted was the only terms you could sign up for and they feel free to levy all kinds of charges to get away from them even if they are failing to provide the service.  I have also noted before how these days you pay in advance for so much and how this actually works against people being efficient in their usage of gas and electricity because with the fixed monthly rate you do not see any gain for yourself especially if on rental contracts of less than two years that are so common:

I live in a house in which we economise as much as we can in terms of utility usage not simply in an (often fruitless) effort to keep bills down but also because we are aware that humans are causing damage to the world through excess usage of finite resources.  We tried to have solar panels installed but out roof proved to be the wrong shape which suggests to me that people should be working on all kinds of shapes of panels if we are really going to make a break through for renewable energy.  The halving of the government incentive to have panels installed is damaging in so many ways, notably in raising unemployment in the private sector which is supposed to be soaking up job losses from the public sector and slowly down an improvement in our 'fuel security'.  Fuel security is something the British government has been obsessing about at least since the 1960s and focuses on how Britain can ensure it has enough fuel to power its industry and domestic sector.  As Britain moved steadily away from the consumption of domestically produced coal from the mid-1960s down to 1985 and the North Sea oil reserves were depleted there was a renewed awareness of a need to secure sources of oil in countries friendly to the UK.  This is nothing new and was on the agenda particularly 1967-73 where turbulence in the Middle East led to the cutting of oil supplies and then a substantial price rise which ended the post-1945 economic boom for good.  Fuel security has been what has motivated US and UK involvement in Iraq, probably in the Libyan revolution too; British involvement in Nigeria and US concerns in Venezuela.  The complicating factor compared to the 1960s that China too is securing fuel resources by heavy investment in any country which will accepts its money. 

Government subsidies to install solar panels right across the country would secure and increase jobs as well as help reduce the UK's fuel insecurity through reducing dependence on fossil fuels from countries which might not like us.  As I have noted before:  Britain gave away its lead in sustainable energy.  However, in Derby recently I saw a line of small scale turbines on the roof of an office building that were providing electricity to the building.  Britain lags behind building wind turbines along motorways the way the Germans do and can be achieved without even having to upset the powerful pretty-England lobbyists.

Anyway, solar power is currently out for our house.  This means we remain dependent on one of the six companies and their authoritarian approach to pricing and charges.  For the last twelve months we have paid £140 (€167; US$217) each month.  Our consumption of gas has risen probably due to the cold period in January compared to 2010 but our consumption of electricity has fallen.  In 2010 we ended the year with £277 in credit, i.e. we had paid them £277 more than was due for the amount of gas and electricity we had used.  I contacted the company, Scottish Power, to ask for a refund but was told that was not possible as our consumption might rise.  So, they were saying that they were holding this money to hedge against us suddenly consuming more.  This makes their statements that readings are important so that we 'only pay for the fuel you use' utterly ridiculous.  Instead we are simply giving them a set amount of money and they take out what they feel they need. 

The invidious nature of this has been revealed this year.  For 2011 we ended the year £582 (€692; US$902) in credit to the company, so they now have an additional £305 of mine for fuel of theirs I have not bought.  On this basis the more fuel I save this year the larger that sum will rise.  I have enough credit with them to pay for all our gas and electricity until mid-April 2012.  However, if I stop paying penalty charges will be levied on me.  You might think that on this basis they might reduce my standard monthly charge, but no, it has been set again at £140 per month.  I guess I should be grateful that the monthly charge has not risen but I am resentful that the company is holding on to my money gaining interest on it in their account when that is money which could feed my household for more than two months.  At the rate we are going within two years I will be paying a whole year in advance for my fuel.  I can see that is in the utility company's interest but it is certainly not what the majority of us would consider good customer service. 

You have to step outside the world of utility companies and their warped mindset to see how greedy and twisted their approach is.  Imagine I went into a supermarket and when I arrived there they took £140 from me.  I then proceed to spend £100 on food.  When I reach the till, rather than be refunded the £40 that I have not spent, the shop holds on telling me that they need it just in case more than two years from now I might suddenly spend some extra on one of my trips.  Surely if I do then they can charge me more.  The amount of cash that utility companies must be holding for resources they have not provided to the customer must be in the millions.  They do not seem to be investing it in improving their provision and they are certainly not reducing prices to customers.  Fuel poverty now affects 5.5 million people in Britain up from 3.8 million at the end of 2010.  Partly this is due to the fact that household incomes fall as all costs rise, pay in many cases is actually falling and unemployment continues to rise.  To me it seems that the only way I can get my money back is to say that I am leaving Scottish Power and moving to another company, presumably, though I have not put this to the test, they would be compelled to pay me back the excess money they have taken from me.  Much of the focus is on the price that we are charged for the utilities we use, but pressure also has to be brought to bear on companies for how they charge us especially for fuel we have yet to use.

P.P. 09/01/2012
Well, I am pleased to say that by threatening Scottish Power with moving my account to another provider they have agreed to refund me £440 in two stages.  I received the £40 last week and should get the £400 by 17th January.  They have also reduced my monthly payments from £140 down to £90, thus by the end of the year I will be £1040 better off.  Now, that is a reward for using less gas and resources and has come at just the perfect time to deal with all the New Year bills.  What is irritating is that it has taken pressure spread over two years plus a threat to move my account to get my money back when, in my view, they should be attentive to these things and do them unprompted.

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