Electricity contract.

Henry Ford III

I entered a contract with Energia for 12 months last June, and they promptly increased their prices 2 months later.

Net result (as far as I can see from Bonkers) is that I'm now paying too much c.€300 p.a.

I contacted Energia who said there's a €50 charge to get out of contract early.

Could this be correct? I'd have thought that them breaking the terms (by increasing the price) would invalidate the agreement.

JTMan

For some reason, increasing prices invalidates broadband contracts, but does not seem to invalidate electricity contracts. Anyone know why?

Henry Ford III

JTMan wrote: »

For some reason, increasing prices invalidates broadband contracts, but does not seem to invalidate electricity contracts. Anyone know why?

I certainly don't.

A contract for a service is the same regardless of the service itself n'est pas?

JTMan

Just found this with a bit of Googling:

It's also worth noting that unlike other types of service providers such as broadband and phone providers, generally with energy suppliers, customers will not be able to leave their contracts early without incurring penalties in the event of a price increase.

With many services, when a price increase is announced, customers in contract are informed that if they are not satisfied with the changes to their contract, they are free to switch without penalty, so long as they switch within a 30 day period. This is not the case with energy suppliers because in the majority of cases, customers sign up to a discounted rate, meaning that their contract is with the discount rather than the standard rate. For example, a supplier with a 30% discount could increase its standard prices but the customer would not be eligible to leave their contract because they would still be getting a 30% discount - that hasn't changed - they're just getting a 30% discount off a higher standard unit price.

Seems outrageous to me. Regardless of whether you are getting a discount or not, if the price increases you should be free to switch.

@Henry Ford III - I suggest you lodge a complaint with the electricity regulator here.

Anymore know more about this?

Henry Ford III

Thanks JTMan. I think I'll do just that.

JTMan

Great, please post back here as to what the regulator says.

Henry Ford III

Looks like I have to complain to Energia firstly, then the regulator.

Henry Ford III

Spoke to the Regulator earlier, and they confirmed what you quoted above JTMan.

I'm to email them in my query and they said they'd dig into it.....

F34

The way a lot of electric companies are doing it now is a set percentage off their normal rates rather than guaranteed unit cost. So they are free to raise their prices but you still get x percent off it just check what you signed up to.

zell12

Henry Ford III wrote: »

I contacted Energia who said there's a €50 charge to get out of contract early.
Could this be correct? I'd have thought that them breaking the terms (by increasing the price) would invalidate the agreement.

They are not breaking their terms as it is a variable tariff contract.

Only JustEnergy offer fixed price contracts.

Xterminator

Hi Op

you are signed up for a % discount on the standard rate. that's what you should be getting. the price of the standard unit can be raised in the terms of the contract you signed. if you get annoyed about that clause after agreeing contract; that's fruitless and certainly not worth making a complaint to the regulator about. You need to know what you are signing up for.

the question is are they appling your discount correctly. you need to check that out. they should be able to answer and demonstrate that. if you have been overcharged, look for a full refund and some goodwill gesture.

If they are honoring their terms, then you need to work out what the cost of leaving current contract is, and what the potential savings from moving to another supplier is. It is a simple sum. will it cost more to move now, or wait till contract ends.

Henry Ford III

zell12 wrote: »

They are not breaking their terms as it is a variable tariff contract.

Only JustEnergy offer fixed price contracts.

A contract with a fixed term, fixed discount %, but a variable underlying rate?

How is that allowed?

zell12

Because you signed it.

Energia shall be entitled to vary the Tariff, standing charges and Pass through Charges and any other elements used to calculate the Charges from time to time. Energia will notify you on your bill, by email, by letter or by way of public advertisement of changes to the Tariff as soon as reasonably practicable and, no later than 30 days before the change comes into effect unless you have signed up to a more flexible arrangement. Such changes shall take effect from the later of the date specified by Energia in such notice or 30 days after the date of such notice.

Henry Ford III

...and why is it different to say a telecoms contract?

zell12

Henry Ford III wrote: »

...and why is it different to say a telecoms contract?

Why wouldn't it be?

zell12

Also be careful with Energia.
Some of their price plans offer the discounted rate up to the average household use of 4200kwh pa, excess use are on standard rates

Henry Ford III

zell12 wrote: »

Why wouldn't it be?

As useful as a chocolate teapot

p.s. A contract is something that in general binds a service provider and it's customer. This clearly isn't binding

Henry Ford III

zell12 wrote: »

Also be careful with Energia.
Some of their price plans offer the discounted rate up to the average household use of 4200kwh pa, excess use are on standard rates

2nd non disclosed material fact in that case.

F34

Henry Ford III wrote: »

As useful as a chocolate teapot

p.s. A contract is something that in general binds a service provider and it's customer. This clearly isn't binding

The discount they offered you off their standard unit is. If they were not applying your discount correctly then you would be able to void the contract.

zell12

Henry Ford III wrote: »

2nd non disclosed material fact in that case.

It is in the t&c's

Henry Ford III

zell12 wrote: »

It is in the t&c's

Can't read them on the phone!

JTMan

Henry Ford III wrote: »

I'm to email them in my query and they said they'd dig into it.....

Well done Henry. Hope you go ahead and email the query in and post back what they say.

Regardless of whether it is in the T&C's or not, if someone is locked into a contract, and the price increases, then one should be able to exit the contract, which is the case in many industries, but for some reason the electricity industry escapes this principal.

This needs to be addressed for everyone and we need to put an end to this unfair practice.

EdgeCase

It is unfair and I assume the logic is that the price of fuel is subject to to change but that also applies to telcos. The cost of business for them is also subject to change eg they could have a substantial increase in the cost of international onward connectivity on fibre routes or they might have to suck up an increase in TV rights for certian channels or sports etc

I don't really see why the energy sector should be getting away with different rules.

L1011

Henry Ford III wrote: »

As useful as a chocolate teapot

p.s. A contract is something that in general binds a service provider and it's customer. This clearly isn't binding

It is binding, you have simply failed to understand it

JTMan

I'm sure it is in the T&C's.

But that is all beside the point. The point is - Is it fair to not be able to exit a contract without penalty when a supplier increases prices? and also is it legal? Other utility providers are not allowed do this. Also, it is not done in several other EU countries.

Henry - Hopefully the regulator revert to you.

zell12

JTMan wrote: »

The point is - Is it fair to not be able to exit a contract without penalty when a supplier increases prices? and also is it legal? Other utility providers are not allowed do this. Also, it is not done in several other EU countries.
Henry - Hopefully the regulator revert to you.

Yes it is legal and fair. You sign up for a variable tariff.
There are more expensive fixed tariffs available from other providers

JTMan

zell12 wrote: »

Yes it is legal and fair. You sign up for a variable tariff.
There are more expensive fixed tariffs available from other providers

The issue is not whether it is fixed or variable. The issue is not allowing you to exit the contract penalty free if the price changes. If your variable broadband price changes, you can exit the contract penalty free, the same should apply to energy contracts.

how.gareth

JTMan wrote: »

The issue is not whether it is fixed or variable. The issue is not allowing you to exit the contract penalty free if the price changes. If your variable broadband price changes, you can exit the contract penalty free, the same should apply to energy contracts.

Excellent news, I’ll be canceling my mortgage ASAP!

JTMan

how.gareth wrote: »

Excellent news, I’ll be canceling my mortgage ASAP!

You can switch your variable mortgage contract without panalty.

zell12

Henry Ford III wrote: »

I entered a contract with Energia for 12 months last June, and they promptly increased their prices 2 months later.
....
Could this be correct? I'd have thought that them breaking the terms (by increasing the price) would invalidate the agreement.

How are you getting on with pursuing this?

Henry Ford III

It went nowhere fast!