When Can an Energy Provider Backdate Your Bill?

Your business can suffer significantly from back billing, and it can be a considerable financial hassle to find out you owe large amounts of money to your energy provider. You should not panic, but you should know your rights.

As per Ofgem regulations, energy companies cannot bill their customers for energy consumed if the billing mistake is the supplier’s. To recoup money lost by errors in billing, some energy providers are alleged to continue sending bills to current and former customers.

The purpose of this guide is to give you information on back-billing and what to do if you receive one. To learn how far back billing can go, read more here.

What’s Back-billing?

Overcharges in your energy costs can be offset by a “back bill” from your gas or electricity provider. This is primarily due to three factors:

The meter readings are just a rough estimate: If you haven’t provided your energy provider with regular readings, chances are they will estimate how much energy your busines has consumed based on previous readings. You will receive a bill if your meter readings reveal that you have used more energy than the last payment covered.

Automatic payments have been canceled: Human error can result in a direct debit being canceled inadvertently. If you have questions about the amount of your monthly deduction, this might occur. You will receive an invoice for the correct amount once the mistake is discovered.

Incorrect meter number billed: A wrong meter number has even led to thousands of households and businesses having to pay back a considerable amount once the mistake has been discovered.

Ofgem’s Back-billing Principle

Under Ofgem guidelines:

• If you have not been properly billed or informed about energy consumed more than 12 months ago, energy suppliers cannot charge you for it.
• Your supplier could increase direct Debits if they were set too low by you. 
• Suppliers cannot recover any shortfall over the past 12 months. 

These terms must be clearly stated in the terms and conditions of the contract. A supplier must follow this regulation, known as the Back-billing Principle.

When the Back-billing Principle Does Not Apply

Suppliers can pursue customers’ debts with a back bill if they are at fault. To prove unreasonable behavior, the supplier must provide evidence. Ofgem cites two scenarios in which the customer would be at fault where the rules do not apply:

• By intentionally stealing energy, the customer violates the law.
• Customers deny suppliers physical access to check meters without a valid reason.

I Received a Back Bill. What Should I Do?

The Back-billing Principle applies if you receive a back bill for:

• The last time you asked for a bill, it took over a year for the supplier to send one.
• Rather than using accurate meter readings, your bills are based on estimated readings.
• A wrong meter has been charged to you without your knowledge.
• An account or meter query you raised with your supplier has not been resolved.
• There was a delay of more than 15 months between your supplier’s reassessment of your payment arrangement, such as a direct debit.

You should contact your supplier as soon as possible if any of the above situations apply to you. This is if you receive a back bill for more than a year of energy use. A letter to your supplier can be written using a template provided by Citizens Advice. It will be necessary for you to file a complaint if you are obligated to pay the entire amount.

Reducing the Risk of Back-billing

You can avoid a back bill by ensuring your meter readings are accurate and not estimates. Your supplier will need monthly readings if you don’t have a smart meter that submits readings regularly. Ensure all information on your energy bills, including your bank account details and direct debit information, is correct, as well as checking that direct debits are taken each month correctly or quarterly.

Whenever you move your business to a new property, contact your old supplier and give them the new address. This will allow the account to be closed and brought up to date. By doing so, you will be able to open a new account and avoid being billed for the energy used by the previous occupant.

Final Thoughts

As a business client, you are entitled to accurate bills from their energy suppliers, and they should respond to issues promptly. You’re also responsible for keeping track of how bills are being paid and if you notice anything amiss – notably if your bills aren’t being paid or seem artificially low., contact your supplier and correct it immediately.