There is nothing worse than that feeling when you have been paying your energy bills monthly, or by the quarter, at the amount requested by your energy provider and you get hit with a bill saying you have more to pay. These additional sums can be thousands, if not tens of thousands of pounds for some small businesses.
If you used more energy than you or your energy provider initially estimated, then the general position is you need to make up the difference. However, there are rules that the energy providers must follow when billing you for historical sums.
Are the figures right?
Always scrutinise the charges contained in the bills. Energy providers make mistakes, like everyone else and if you receive an unexpected bill for more than you believe you spent, especially if you have the assistance of a smart meter to track your spending, then query the bills and ask them to check they are accurate. If you have taken meter readings and submitted them, refer to your previous reads and look at your current reads to see if the figures broadly match.
Is the bill covering a period of over 12 months?
If your energy company has tried to send you a back dated bill for energy use, check the period of time it covers.
According to the back-billing regulations, energy companies are not allowed to charge you for usage going back longer than 12 months. Some exceptions apply to this rule, usually based on your actions and conduct. You are not able to use the back-billing regulations if you have deliberately blocked the energy provider from accessing the meter, or acted unlawfully, such as stealing gas or electric. However, generally, if the fault lies with the energy company and/or no fault lies with you, then the energy company should not charge you for any energy usage from over 12 months ago.
This rule applies not only to consumers, but also to small businesses. Ofgem defines small businesses (referred to as micro-businesses) as:
- businesses that consume less than 293,000 kWh of gas a year; or
- consumes less than 100,000 kWh of electricity a year; or
- has fewer than ten employees (or their full-time equivalent) and an annual turnover or annual balance sheet total not exceeding €2m.
Ofgem has previously estimated that 96% of businesses in the UK will meet this definition and have access to the back billing regulations[1], meaning most businesses in the UK will be able to challenge back-billing of more than 12 months.
If you have been back-billed for a period of more than 12 months, you should notify your energy provider immediately.
What happens if the energy provider refuses to credit incorrect bills?
If your energy provider initially says no to crediting the incorrect bills, you should look to raise a complaint internally and give the energy provider an opportunity to correct their mistake. If the energy provider fails to correct the mistake, you are able to refer the matter to the independent Energy Ombudsman. The Energy Ombudsman has the authority to force the energy company to comply with the rules.
What happens if the back-dated bill is within 12 months and I am unable to pay it?
Even if you were able to challenge older charges, 12 months is still a long time and large bills could have built up in that time period. If paying via direct debit, you will usually see your direct debit increase to cover the additional sums, as well as re-adjust for the future based on the assumption your consumption will remain the same moving forward.
If you are unable to pay your energy debt, you should speak to your energy provider. Your energy provider may be able to agree a reasonable payment plan, or have access to hardship funds that may assist. There may be scope to raise a complaint, even if the charges are due and payable if you have been put in financial hardship due to a potential fault or error by your energy provider in not adjusting your payment sooner, or if your energy provider does not treat you fairly.
How can we help?
Harding Evans is an all-service law firm that is able to take the stress out of dealing with your energy provider in relation to these disputes. Whether you are a consumer or small business, we can review the bills, pinpoint any technical or legal points to raise and communicate on your behalf to your energy provider.
If you have a dispute with your energy provider and need our help, get in touch with our team today.
[1] https://www.ofgem.gov.uk/blog/fairer-energy-deals-microbusinesses