Recommendation 8 of the 2017 Annual Report

Recommendation 8: “Provide information, for instance, on the suppliers FAQ, concerning the billing method associated with the M@ Relève offer”

1. Customer observation

A customer of ENGIE (Regulated Rates Division), is billed bi-monthly (every 2 months) for natural gas and signed up to the M@ Relève offer in 2009: this offer allows customers to send their own meter readings for the issuance of so-called intermediate bills, i.e. not associated with a meter reading by GRDF. The latter takes a meter reading every 6 months for each domestic customer.

A few years after using this service, the complainant asked the supplier for explanations about his billing. He ended up contesting the explanations given by the advisors in Customer Service and the National Consumers Service of ENGIE. The complainant then asked the ENGIE Group’s Mediator to obtain answers to the following questions :

  • Obtain a precise explanation of how the M@ Relève offer works;
  • Understand certain calculations presented on some intermediate bills, which appeared to be illogical or even erroneous;
  • Transmit the personal data held by the supplier, to ensure compliance with the declarations made to the CNIL (French data protection watchdog).

Concerning the 1st update on the general explanation, it was necessary to share information communicated on this service, in particular on the supplier’s website. From this site, an explanatory sheet (whose substance had also been changed in the light of generic recommendations proposed by the Mediation team and followed by the supplier) provides the following details in particular.

It is clearly stated that bills are established “as closely as possible to actual consumption”. The expression “as closely as possible” covers persistent approximations like :

  • First of all, the fact that there are ultimately only 2 actual readings, and 4 possible readings taken by the customer. This means, there is no reading taken by the distributor or customer every month. Therefore, it is necessary to perform a distribution of consumption, over at least two months.
  • Then there is the question of the change of pricing. In fact, in terms of gas, regulated prices change each month, whether upwards or downwards. However, the date of the price change does not necessarily correspond to that of the reading by the distributor or by the customer. So here again it is necessary to perform a distribution of consumption, over at least two months, over two pricing periods.
  • Finally, the trend in the conversion coefficient also has an impact on your bill and can modify the content, every 6 months. It is because of the variations of this coefficient, which is only known by the supplier every 6 months (at the moment of the actual reading by the distributor), that the regularisation is then done over 6 months, with the right coefficient.

In fact, your meter counts your consumption in m3 which is then transformed, in order to be billed, into kWh, through multiplication by a conversion coefficient. Depending on changes to the climate, the gas expands or contracts and the same amount of gas, in m3, can therefore generate varying degrees of heat value, and therefore more or less kWh.

This conversion factor therefore varies over time (depending on the location, since the gas arrives from several supply sources at the French border and mixes at the distributor’s various delivery points, depending on the changes to the weather and outside temperature) and is potentially updated in your billing each half year, after reading of your meter by GRDF’s technician.

It is GRDF which has the responsibility to monitor changes in the climate and their impact on the conversion coefficient of a m3 of gas in kWh to be billed.

Since this “actual” conversion coefficient is only provided by GRDF at the end of each half year, at the same time as the readings taken from your meter by the technician, it is therefore a conversion coefficient estimated by your supplier that is used in calculating your intermediate bills. This also explains why the supplier has chosen to regularise over 6 months and not 2.

  • The solution taking into account the actual conversion coefficient for each month, and a fair consumption for each month in order to apply the corresponding price, would mean waiting for the installation of smart meters, which should help do away with these uncertainties / estimates.

To meet the expectations of the complainant, it was then necessary to repeat and explain each calculation, in order to understand how his own meter readings were included in each bill, and how each half-yearly bill was then calculated (that issued at the time of meter readings by the distributor). The mediation team explained the rules used by the supplier for each bimonthly bill, as follows.

For natural gas, your consumption is recorded in m3 on the meter. Billing is based on kWh. It is therefore necessary to convert the m3 into kWh via what is called the conversion coefficient, which is determined by the distributor. This rule is that applied for readings taken and transmitted by the distributor every 6 months.

On the other hand, as regards the so-called intermediate bills, the different rules applied by your supplier vary according to the case scenario which presents itself:

  • A – When the reading is estimated by the supplier (so no customer reading), for the 1st intermediate bill as for the second;
  • B – When a customer meter reading No. 1 is provided for the 1st intermediate bill (2 months after an actual reading of the reading by the distributor);
  • C – When a customer meter reading No. 2 is provided for the 2nd intermediate bill (4 months after an actual reading taken by the distributor, and therefore two months after the 1st intermediate bill).

Point A : In this case, the kWh to be billed are directly estimated by the supplier’s software application. From this estimate of kWh, the supplier deduces the volume in m3 (by dividing the kWh by the last known conversion coefficient), and therefore the reading equivalent to these estimated kWh. The software application is programmed to perform rounding up and down of displays. This may explain why, when calculating in the opposite direction (i.e. m3 in kWh, by multiplication of the conversion coefficient), there may be a difference, generally upwards, between the result in kWh of the operation, and that originally estimated by the supplier. But what is billed is the kWh estimate made by the supplier.

Point B : In this case, calculation of the kWh to be billed is as follows:

(customer meter reading No. 1 – GRDF reading) x Last known conversion coefficient of the supplier.

So, the rule is simple in this case since the calculation is performed in the natural direction, i.e. from the customer meter reading, and therefore from m3 to kWh. We cannot detect any display discrepancy on the bills in this case. The customer meter reading has been correctly taken into account.

Point C : In this case, the calculation rule for kWh is not done on the basis of the last reading taken and transmitted by the customer, but starts from the last reading transmitted by GRDF 4 months ago.

The calculation is therefore :

[(customer meter reading No. 2 – GRDF reading) x the supplier’s last known conversion coefficient] from which is deducted the kWh of the 1st 2 month period (that is, the calculation of point B).

This rule can lead to inconsistencies in the display of rounding up and down on some of the bills. However, this method of calculation is correct and takes full account of your own meter readings No. 2.

2. Mediation solution

The supplier’s processes in order to calculate consumption to be used in the 3 scenarios (consumption estimate; taking account of the customer meter reading on the 1st intermediate bill; taking account of the customer meter reading on the 2nd intermediate bill) are correctly applied.

However, it remains that in some cases (especially when consumption is low), the risks of rounding the data displayed up or down are not totally consistent with the calculation of consumption (which is nevertheless correct).

The M @ Relève service takes account of the transmitted values. This allows a “fair calculation” (term used by the supplier on the website and justifiably) of consumption at the time of the 2 intermediate bills (2nd and 4th month). On the other hand, the calculation rules should be more explicitly indicated on the site, in order to allow the consumer to understand the logic behind calculation of the intermediate bills (even if this all seems somewhat technical).

It should also be noted that, although the customer meter readings allow calculation on the basis of the transmitted readings of the intermediate bills, these readings are not used for calculation of the regularising bill which is only based on the data transmitted by GRDF, and from which payments of intermediate bills are withdrawn (based on customer meter readings). This method should also appear more clearly on the website.
This information would allow a consumer to check their bill more precisely, or to redo the consumption calculations if they wish, and enable the supplier’s call centre agents to provide this information.

3. Generic observation

Call centre agents must be able to provide detailed explanations of the M@ Relève offer when a customer of ENGIE asks them for details or if they do not understand certain approximations made on their billing. To that end the Q&A and the explanatory sheet concerning the M@ Relève offer should be updated on the supplier’s web site, as should the scripts of the call centre agents (to enable them to refer to the sheet in the Q&A).
It is worth noting however that the progressive roll-out of smart meters should resolve these difficulties, which are inherent to the fact that meter readings are not as yet frequent enough to enable accurate monthly billing.

4. Recommendation / generic solutions.

The Mediation team recommends supplementing the information on the M@ Relève offer present on the explanatory sheet of the website and in the suppliers’ FAQ. Specifically, the elements to be included are:

  • More fully explain the (normal) uncertainties related to some of the parameters taken into account in billing (frequency of price changes and knowledge of the conversion coefficient, which involves estimating consumption month by month, despite bimonthly billing);
  • Indicate the rules applied to calculate each bill, which can then explain, in compliance with the decree on energy bills, why some data, especially in cases of low consumption, may be approximate (because of the rules for rounding calculations up or down).

However, it is important to remember that the suppliers’ processes for calculating the figure for consumption are correctly applied. And this in the three possible scenarios (estimation of consumption; taking account of the customer reading on the 1st intermediate bills; taking account of the customer reading on the 2nd intermediate bills).