Throughout 2022, the wholesale cost of gas and electricity has been rising. This means energy suppliers, including SO Energy, are now paying more for the energy they buy to supply homes than in previous years.
SO Energy understands that customers might be concerned about how the increase in the price of wholesale energy affects them and the impact on their Direct Debit payments. Fortunately, there is help at hand to protect customers from these rising costs this winter.
Keeping customers informed
It is important for SO Energy that they keep their customers informed, so here they’ve explained why they’ve changed their Direct Debit, provided a step-by-step guide to their review process and how this helps to build credit on their account for the winter.
They’ve also detailed the support they offer, particularly through difficult times.
- Why is the fixed Direct Debit changing?
SO Energy don’t take making changes to their Direct Debit payments lightly and the decision to adjust customers’ Direct Debits follows the UK Government announcements about the financial support packages offered to energy consumers.
Energy Price Guarantee
The Energy Price Guarantee caps energy prices for typical households at around £2,500 a year
The Energy Price Guarantee caps energy prices for typical households at around £2,500 a year, for the next two years. Remember that each household’s actual energy cost will depend on its energy usage and the amount of credit or debt on its account, so the annual bill may be more or less than £2,500.
SO Energy is adjusting the Direct Debit charges to reflect this new cap. For customers having their electricity supply with SO Energy, they will continue to receive the £400 discount from the Energy Bills Support Scheme. This is in addition to the Energy Price Guarantee and will be paid over the next 6 months, starting with the October statement.
- How can Direct Debit reviews help customers through winter?
For customers who pay in equal monthly installments throughout the year, they’ll build up a credit on their account during the summer, because they’re likely to use less energy in warmer months. This credit can then be applied to the payments during colder and darker months (when consumers use more energy), providing financial support in the winter. If customers decide to pay seasonally, they’ll pay more in winter (when they use more gas and electricity) and less in summer.
- How to review the Direct Debit?
Throughout the year, SO Energy reviews Direct Debit payments to make sure customers are not paying too much or too little for the energy used.
Listed below is the four-step process for reviewing Direct Debit:
- SO Energy asks for meter readings so that customers pay for what they use
SO Energy customers paying through Direct Debit make regular monthly payments towards the estimated annual cost of their energy usage. If they have a smart meter, there’s no need to submit readings, as their meter does this automatically.
Importance of a smart meter
It’s easy to submit readings through My Account, where customers can also opt into meter read reminders
If customers don’t have a smart meter, submitting regular readings helps in learning how much energy is being used, so that bills generated can be more accurate. It’s easy to submit readings through My Account, where customers can also opt into meter read reminders.
When it’s time for a Direct Debit review, SO Energy request readings from customers to make sure they have a recent reading of the energy usage. Don’t worry if forgotten to submit a reading; SO Energy will estimate the reading for the customer.
Calculating the monthly Direct Debit
To calculate the monthly Direct Debit, SO Energy multiplies the predicted yearly usage of energy in the home by the unit rate (the cost of each unit of gas or electricity) and adds the standing charge (the fixed daily cost to connect the home to the energy grid).
The tariff charges also factor in the cap on gas and electricity unit rates. All customers on their variable tariff, So Flex, and customers on some of their fixed tariffs can use their Energy Price Guarantee Discount Checker to see their projections of the new unit rates and discounted prices.
As a guide, SO Energy’s expects:
- Low energy users to pay less than they do today.
- Typical users to pay about the same as they do today.
- High users to pay more than they do today, but still a lot less than what were previously projected.
When the UK Government announces its new energy support package in January 2023, SO Energy will once again contact customers about upcoming changes to their Direct Debit.
- SO Energy acknowledges the account balance
The changes SO Energy makes to Direct Debit payments may vary between customers, because they consider any credit or outstanding charges associated with their account and spread these adjustments over the coming 12 months. From one month to the next, the energy needs may change and customers may use more or less energy, depending on the needs of the household.
Make equal adjustments to payment plans
SO Energy will make equal adjustments to their payment plan over the upcoming 12 months
If the account is in debt because customers used more energy than was expected, SO Energy will make equal adjustments to their payment plan over the upcoming 12 months. This avoids issuing a substantial payment request for the energy used. Similarly, if customers use less energy than was expected, they may have overpaid and might have credit on their account. In this instance, the customer may be eligible for a refund.
The graph below demonstrates how a household's energy usage fluctuates over a year. Notice how less energy is consumed in warmer, lighter months and more energy is consumed in colder, darker months.
The account balance associated with this household also changes throughout the year. Some months the account is in credit and in other months the account is in debt. The monthly Direct Debit payment is the average cost of energy usage across 12 months, with consideration of the balance on the account.
| The graph demonstrates how a household's energy usage fluctuates over a year |
Build credit on the account during the warmer months
Please bear in mind that it's important to build credit on the account during the warmer months (when customers probably use less energy), so as to cover the higher energy usage in the winter. Therefore, refund availability and amount can vary depending on the time of year.
- SO Energy only adjusts monthly payments
Whether the customer is on an equal or seasonal payment plan, SO Energy will estimate their annual energy usage in the same way. The total estimated cost for the year will be the same, no matter which payment structure the account follows.
Energy Bill Support Scheme discount
The Energy Bill Support Scheme discount is available from October 2022 to March 2023, and the payment will be recalculated when the Energy Bills Support Scheme ends in March 2023. Find out more about seasonal payments.
- SO Energy adopts the Energy Bill Support Scheme and Energy Price Guarantee
For customers who avail electricity with SO Energy, they will include the Energy Bill Support Scheme discount in the October to March bills. The rebate for the first two months is £66, and in the remaining months, the Scheme offers a discount of £67. Find out more about the Energy Bill Support Scheme.
Under the Energy Price Guarantee, the annual bills for a typical household will be capped at about £2,500. Please bear in mind that the actual annual costs will depend on how much energy is being used, so the yearly bill could be greater or smaller than £2,500.