Please can someone explain to me how the monthly DD plan works in practice?

Please can someone explain to me how the monthly DD plan works in practice?

I.e. Do you have to submit monthly meter readings? 

If not monthly meter readings, how often?

Do the monthly direct debit (DD) payment amounts change according to variable energy prices? 

How are monthly DD payments adjusted according to energy usage? 

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Hi Anonymous, let me start by saying hello. I hope the following gives you some insight into how Direct Debits work;

1) Regarding direct debits and how they work in practice, I can confirm that you do not have to submit monthly readings. However, if you want the most accurate bill for your usage (and don't have a smart meter), then the more often you submit readings the better.

2) Energy companies are required to review customer direct debits at least once a year and in your first year this is usually done after your initial 6 months (to prevent you from building up too much debt). So the more readings you have submitted in that first 6 month period the more accurately your direct debit will be adjusted at the time of review.

3 & 4) Monthly direct debit (DD) payment amounts only change according to variable energy prices if you are on a variable tariff. If you have opted to switch to a fixed price tariff, then the price of energy per unit is fixed for a set period - i.e. 12 or 18 months.

This does not mean that the amount you pay on your direct debit is fixed for 12 or 18 months.

For instance, if you have been quoted a DD price of £50 per month for electricity based on an annual usage of 3,100 units per year, and you then choose to leave underfloor electric heating on 24 hours a day for the following month, which in turn causes your consumption to go up to 4,000 units per year, then on your direct debit review the amount you pay WILL go up! This is because it's the unit rate per kWh that is fixed, not your quoted direct debit amount in ££.

I hope this helps answer your points. :)

Stephen Denyer

Ned Al-Astrabadi

It was surprisingly simple to switch to a new energy deal and I saved about £230.

Buckhurst Hill