FAO Mr Silvio Scerri, Arms CEO
FAO Mr Joe Mizzi, Minister for Energy and Water Management
Re Invoice 27917423; €647.32
Dear Mr Scerri and Mr Mizzi
I am writing to you to put on record that - over the billing period 10th March 2018 to the 26th April, 2019 – our household has been overcharged to the tune of €106.53, in contravention of the Electricity Supply Regulations. The Electricity Supply Regulations stipulate annual allowances. Recently, Arms has changed the length of the billing period to a period of circa 2 months. Because of this, the annual allowances are converted to 6 or 7 pro rata allowances over the year.
I have attached an Excel spreadsheet which illustrates how I have come to this conclusion. I used the second page of the last 7 two monthly Arms bills to calculate the total number of units charged at each band. To my surprise, our annual consumption of 7917 units of electricity did not utilize all the quotas at the cheaper rates. We lost out on 271.589 units of electricity at €0.1298 per unit and we were also charged at €0.3420 per unit on 82.356 units of electricity. We should never have paid at the €0.3420 per unit band because we did not breach the 10000 units per year, to be liable at this band, as stipulated by the Electricity Supply Regulations.
Unfortunately, Arms is the sole, state owned utility billing company. Therefore, under duress and without prejudice to any legal action I may consider in the future, I enclose two cheques – one in the amount of €540.79 and the other in the amount of the overcharge of €106.53. These total to the €647.32 of invoice 27917423.
I would like to think that you will carefully study the Excel spreadsheet and understand that we have indeed been overcharged. This is why I expect the cheque in the amount of €106.53 to be returned.
I used the Arms online calculator to check my workings. As you can see this shows that the cost of our electricity consumption over the period 10th March, 2018 to 26th April, 2019 is €1005.68. From my workings using Method 2, the cost of our electricity consumption over the same period, not including the eco reduction is €1005.69. The 1 c difference is probably a rounding error.
As you no doubt know, the crux of the problem is that the billing period - in number of days - constitutes part of the algorithm for calculating the cost. So - simply put - to work out the cost of the bill, the algorithm will calculate the pro rata quota of allowances, according to this number of days. If the billing period is a year, then there would be no problem at all. But because the billing period is chopped up into 7 two monthly bills, then the pro rata quotas will not be at all sensitive to the peaks and troughs of consumption over the year.
In fact, this, of course, is the reason for the lengthy disclaimer that comes with the Arms online calculator. The cost depends very much on the length of the billing period.
Finally, I would like to say that this analysis is the analysis of the cost for our household for this last year. Of course, it will differ from household to household and from year to year. The point is that it would be very unlikely for the cost of electricity, using the annual allowances method, to exactly match the cost of electricity using the Arms pro rata allowance method. Surely Arms needs to look at this situation urgently to ensure that consumers of electricity are not paying over the odds? Maybe a look at the UK will do the trick? When I lived in the UK, we paid a fixed amount by direct debit per month over the year, with the understanding that there would be an adjustment at the end of the year, if this was necessary.
I hope to hear from you soon.
PS Letter with cheques sent by post