- Was electricity bill for almost £30,000 justified?
- Capacity charges unreasonably high for client with low consumption.
- Large school on incorrect Climate Change Levy (CCL) Band
A solicitor near Birmingham called us to ask for our assistance. His client had been billed for almost £30,000 for electricity he thought he had not used. Over a period of three years, they had disputed it with the electricity supplier, escalated it to a senior manager and then taken the matter to the regulator. Nobody could find fault with the bills raised by the electricity supplier. The solicitor was not confident about taking the case to court.
The solicitor sent the file to us. We read the papers and formed an opinion that the supplier was at fault. We offered to take on the case on a no win-no fee basis. Within a month the supplier had admitted that they had made a number of errors and that the client was not liable to pay the bill for almost £30,000. They agreed to cancel the bill, issue a new bill and totally change the structure for charging the client. We are now pursuing the supplier for compensation, in addition to the savings on the original electricity bill. That will compensate the client for some of the time and expense wasted on the exercise over three years.
When our client, an independent school, installed a new electricity supply in 2003, they entered a five-year agreement to pay capacity charges based on a much higher level of capacity than was required for the supply. The client appointed Business Cost Consultants to carry out an audit of their utilities in 2004. Business Cost Consultants identified that the client had been given a much larger electricity capacity than they required and was on a tariff that is generally appropriate for heavy electricity consumers.
The client had not been provided with good advice at the time of the installation. Furthermore, the supply agreement with the electricity company had not been signed by an authorised person. It had been signed by the building contractor. The supply capacity had been set far too high and the client was on an entirely inappropriate tariff. The client was effectively committed to that tariff by the five-year contract. As a result the client was paying over 3 times as much for electricity as it should have been.
Business Cost Consultants managed to obtain acknowledgement from the supplier that both the capacity and the charges were unreasonable for the client’s actual consumption, and agreed to change to a more appropriate tariff. With some persistent pressure, the supplier agreed to apply this reduced rate retrospectively. This reduced the client’s outstanding bill by 66% – a saving of more than £6,500. In addition, our analysis identified that a different customer category would be more suitable for this particular client. Therefore we reduced their ongoing costs by a further 66%.
When Business Cost Consultants was engaged by this client, our analysis highlighted that it had been charged Climate Change Levy (CCL) and VAT at the incorrect rates for some time.
On the client’s behalf, Business Cost Consultants discussed the situation with Customs and Excise and then pursued the incumbent electricity company for a rebate. The client was compensated for the previous three years, amounting to almost £8,000. This client is now paying VAT and CCL at a much lower rate and continues to make savings as a result of our analysis.
Contact us to find out more about how we can help you with your business electricity dispute.