Have consumers been bankrolling the power companies?

Countless people have told VRT that in recent days they have been informed that they will be receiving large amounts back from their power companies.  They have all received their annual bill and are in line for a refund because the advance payments they were charged by far exceeded the cost of the energy they consumed.

Last year power prices shot up as a result of Russia’s further invasion of Ukraine and the subsequent grab for alternative sources of power but prices have meanwhile fallen back meaning that annual bills are lower than expected.  However, VRT discovered that often the main reason why households are receiving a refund is the fact that they cut back on energy consumption – a reduction that power companies ignored in their charging.

Many consumers are now receiving rebates of 1,000 euros or more.  Often these are people who cut back around a fifth of their energy consumption but in several cases companies charged customers over two times the amount that the customer cut back on.  The discrepancy is enormous. Last year companies took account of the projected purchase prices for power over the coming year and charged this on to their customers failing to consider prices could fall and ignoring the potential for cutbacks.

Refunds often total several thousand euros.  Many of those VRT has spoken with are wondering whether they have simply been bankrolling the power companies.  Some power companies didn’t allow customers to reduce the size of advance payments even when pressed by customers saying they were making cutbacks.

VRT spoke with energy expert Dieter Jong and asked him whether power companies had consciously been overcharging.  He says that it’s more complicated than that.  Power companies calculate projected future consumption on the basis of past consumption and figures provided by network operator Fluvius.  Power companies usually work on the basis of average consumption during the past three years.   Even realising consumers are cutting back the companies were forced to make advance purchases to ensure they can meet supply.

Power companies are obliged to use past consumption as the basis for their calculation of advance payments because two-thirds of households in Flanders still operate a mechanical meter.  Only the new digital meters are able to provide the network operator with monthly consumption figures.  Power companies often only see that customers have actually cut back when Fluvius gives them the annual meter readings.  That means households may have been cutting back for a year before their power companies is alerted to the fact.

Some big power companies like Engie and Luminus have been reducing advance payments at the request of customers with mechanical meters, but only if the customer provides monthly readings.  It can usually be done online.  The power company then modifies the advance payment and customers see they haven’t been overcharged when they get their annual bill.