Optima Energy issues stark warning on pass-through cost validation following Targeted Charging Review

Optima Energy Systems, a leading developer and provider of advanced energy management software, predicts that business energy users could be left unprepared for the changes implemented under Ofgem’s Targeted Charging Review.

Optima, who work with some of the largest energy users and consultants in the UK, say a major area of concern is pass-through costs. It warns that organisations need to urgently review their bill validation processes or they could be at risk of collectively wasting £millions on incorrect energy bills.

Industry experts estimate that utility invoices currently contain errors of between 3% and 5% by value of overcharging. A rise in the complexity of energy contracts means the error rate only looks likely to increase over time.

Optima Energy Systems’ Business Development Director Steve Kemp says ‘the introduction of the Targeted Charging Review over the next two years means it will become increasingly important for organisations to check whether pass-through charges are being validated correctly. We know from experience that whenever new charges are implemented this always results in a rise in billing errors.’

Mr Kemp comments: “It’s something that was probably historically overlooked or considered not that important when bill validation software was first developed as pass-through costs only accounted for circa 30% of the delivered rate. But these costs are rising and now account for more than 50% of the total bill, and this will increase to as much as 60% in the future. With the changes being made it is more important than ever to ensure all pass-through costs are being thoroughly and comprehensively validated. Not doing so could result major discrepancies in energy bills being missed by your software.

“As a leading software provider to the energy market, we feel it is our duty to ensure customers are charged correctly for the energy they use. And as such we validate 100% of the bill giving businesses that extra peace of mind. As we work towards the implementation of the Targeted Charging Review we will continue to monitor changes in the market to ensure all charges continue to be validated correctly and in full.”

Optima Energy Systems is an active participant at the Charging Futures Forum, run by National Grid. The forum is where users of the electricity network learn, contribute and shape the future of charging arrangements, including the Targeted Charging Review and the Access and Forward-Looking Charges Review. It will also be implementing the final decision on the Access and Forward-Looking Charges Review within the pass-through validation of invoices when it is introduced.

For more information visit https://www.optimaenergy.net/products/bill-validation/