We understand that you may not use your energy evenly throughout the year, so paying an equal amount each month doesn't suit everyone.
That's why we offer the option to pay a different amount during summer months and winter months, so you pay more when your usage is higher and less when your usage is lower.
Firstly, we calculate your forecast annual energy costs and then divide this number by 12, giving your average monthly payment amount, and then adjust it for the time of year. We reduce your average payment by 25% during the summer months and increase by 25% for the winter.
Your summer payments are taken between April and September and your winter payments are between October and March.
Over the course of 12 months, whether you pay by equal monthly instalments or by a seasonally adjust amount , you'll pay exactly the same amount.
Your forecast usage is based on all the information you provided us with during the quote process. The most accurate way to forecast your costs is using annual kWh figures (these can be found on your energy bills), but if you don't know these or have them to hand, we can help you estimate it by looking at the tariff you are currently on and how much you are paying, or by selecting either the 'basic estimate' or 'detailed estimate' options.
In the above example we expect to spend £600 during the course of the next 12 months based on the information provided. This means that your average payment amount is £50 (£600 / 12 months = £50).
To calculate your summer payment amount we then reduce your average payment amount by 25%, in this case: £50 x 75% = £37.50.
The winter payment is calculated in a similar way but we increase the average payment amount by 25% to account for the higher usage: £50 x 125% = £62.50.
If you add up all the payments over the course of the year the payments made equal total energy charges. 6 x Summer Payment (£37.50) + 6 x Winter Payment (£62.50) = £600.
As we take payment in advance of your usage, we would expect that your account should remain in credit most of the year. However, because you are paying seasonally adjusted amount, we would expect the fluctuation of your account balance throughout the year to be less than if you paid an equal amount each month. Those paying an equal amount each month could expect to see a much bigger credit towards the end of summer, and a much bigger debit towards the end of winter.
During your first month, your account will be in credit because we've taken your first Direct Debit but we haven't produced your first statement yet. Your next month's Account Balance will be calculated as follows: the Account Balance from the previous period (i.e. your first payment) - your charges for the month before + plus your next month's advance payment.
So in the example used above, January Account Balance is your winter payment amount (£62.50). Your February Account Balance will be your previous month Account Balance (£62.50) - the January energy charges (£71) + your February advance payment (£62.50) = £54 CR.