February 27, 2024

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Monthly settlement as of this month is possible with all energy suppliers: who is this smart idea for?  |  My guide

Monthly settlement as of this month is possible with all energy suppliers: who is this smart idea for? | My guide

Mining energyMore and more families are replacing the classic system with an advance and final bill for a monthly settlement. This option will be mandatory for every energy supplier from this month onwards. The advantages and disadvantages depend largely on the contract price formula you have with your supplier. Mijnenergie.be Shows you the way.


Written by Kurt Deman, in collaboration with Mijnenergie



source:
Mijnenergie.be

The monthly statement in brief

With this type of settlement, you pay exactly for what you used during the last month at the energy prices applicable at that time. It is best to compare the system with your telecom operator's bill.

Important details: Monthly settlement is only possible for digital meter owners. Do you have such a device? Below we discuss the usefulness of fixed, variable, and dynamic power rates.

Reading advice: Is it still beneficial to postpone digital meter installation?

Option 1: Have a fixed power rate

With a fixed price, you pay the same price per kilowatt-hour throughout the year. The difference between down payment and monthly settlement arrangements lies in the distribution of energy costs. With a monthly advance you pay a fixed amount each month. With a monthly payment, in most cases you pay more during the winter than you do during the summer. The logical explanation: you use more energy in the winter. At the end of the trip – after the final bill has been settled in advance – you will pay exactly the same amount.

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Professional monthly settlementDirect confrontation with your monthly consumption may lead to greater energy awareness.

Contra monthly settlement: It is best to calculate your high winter bill in advance to avoid unpleasant surprises.

Option 2: Have a variable power rate

With a variable rate, the balance at the end of the year depends on the formula you choose. With a variable energy rate with advance and final billing, the energy supplier does not record your consumption each month. It is based on the features of consumption. They are based on average household consumption throughout the year. 17.64 percent of your annual consumption falls under the current variable prices for January, while in July it is only 1.59 percent. For most households, these estimates are largely in line with reality.

The picture looks different if, for example, you are not home for a month in December. In December, energy prices were at their lowest levels in 2023. With the classic pre-billed system, the energy supplier allocates 16.42 percent of your total annual consumption to December prices, despite your absence. With your monthly bill, your energy supplier knows that you used almost no energy in December. So the share of your annual bill that you could benefit from December's price drop was small.

Although there is an important caveat: energy prices are usually a little higher in the winter. The unusual situation in 2023 came on the heels of the energy crisis of 2022. At that time, rising market prices meant that advances to many households were no longer in line with the wholesale prices of the time. The result was that many families received a very expensive final bill. Anyone who then increased their down payment may have been paying too high a down payment for several months, while market rates had already fallen sharply. The energy supplier did not pay the difference until the end of the contract year. In this way, many households were playing bank for energy suppliers.

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For completeness: For variable contracts with a quarterly indexed spot parameter, the actual energy price is not known until after the end of the quarter. In this case, monthly settlement is not possible.

Professional monthly settlement: You always pay exactly for what you used during a given period at current energy prices. No hassle with progress that no longer matches reality.

Contra monthly settlement: Not appropriate in some situations when your consumption pattern differs significantly from the consumption pattern of an average household. It is best to calculate your high winter bill in advance to avoid unpleasant surprises.

Option 3: Have a dynamic rate

Thanks to a dynamic rate that follows hourly rates, invoices are automatically generated monthly.

The comparison pays off: A quarter of households miss out on annual energy savings of €300.

Nearly 100,000 customers

Since 1 January 2024, you can request a monthly energy bill from any energy supplier. The five energy suppliers with the largest market share (Engie, Luminus, Eneco, TotalEnergies and Mega) have been offering the monthly settlement option for more than a year and a half. Although this option did not receive much support at first, the number of customers has increased in recent months to more than 61,000 electricity subscribers and 35,000 natural gas subscribers.

Despite this increased response, energy suppliers are not always willing to adjust their billing method. The Federal Energy Ombudsman has already registered 260 complaints in the first nine months of 2023 regarding delays in monthly billing.

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Read more on Mijnenergie.be:

Will the social energy tariff give way to the energy premium?

Distribution network prices 2024: average +27 euros for electricity and +18 euros for natural gas

What will change in terms of energy on January 1st?

This article is brought to you by our partner Mijnenergie.be.
Mijnenergie.be is an independent energy price comparison site for electricity and gas offers.