ENERGY

Are energy suppliers milking it when it comes to farms?

Why are farms and businesses in general susceptible to being overcharged on their energy bills? The main cause is the energy suppliers billing validation processes, which is how received data is analysed and processed by the billing system.

Energy supplier billing systems operate autonomously, there is little or no manual input. Invoices, letters, reminders, notifications, even requesting access to read the meter are all automated. The involvement of a supplier’s representative is largely as a result of the telephone enquiries generated due to the above correspondence being sent out.

With this reliance on billing systems one would imagine they are complex affairs. However, many billing systems are rudimentary and are designed for one thing, generating invoices. This includes producing estimated invoices where the data falls outside set billing parameters.

This may seem like a reasonable solution, after all receiving incorrect information is not uncommon, but what happens if it’s not an isolated incident? How often can readings be rejected before they are investigated?

In an audit we carried out this year, the billing system had rejected meter reading after meter reading for almost a year, producing estimated invoices even though the information was supplied by a smart meter. The subsequent £10,000 refund the business received is an indication of the impact poor validation can have.

[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]”The metering error is not uncommon and the energy supplier continuing to invoice was not surprising”[/perfectpullquote]

Also, the validation in place is limited, as it only reviews the total energy consumption and takes little account of when energy is used. For farms who are being charged on two or three rate tariffs where evening/weekend and night registers also record supply, little or no validation appears to be in operation so billing errors can continue for years and transfer from one supplier to the next.

In another recent example of failures with billing validation, we identified £6,000 of overcharges on a meter that was removed over two years ago, even though there was clear evidence showing a billing error by simply looking at the invoices.

Subsequently, when auditing two dairy farms, the exact same metering error had gone unchecked by the billing system because of its limited validation. The metering error is not uncommon and the energy supplier continuing to invoice was not surprising, but the combined £40,000 of overcharges recovered was astonishing. It was a clear indication that validation didn’t take into account multiple rate meters and provided an invoice was generated, it passed energy supplier scrutiny, in one case for 4 years.

Had the meters been replaced, which under the rules of statutory meter changes (SMC’s) they could have been, only a retrospective audit of the farms would have uncovered the fault. Without an audit, overcharges such as these, would never come to light.

Failures within billing validation is the main cause of energy overcharges and its costing businesses millions of pounds a year, but rather than preventing incorrect invoices being sent out, billing systems have been given complete autonomy. Therefore, overcharges will continue.

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