2 tier tariff or standing charge

ronald208

I made a spreadsheet to compare 2 tier tariffs and standing charge tariffs and I can't find much difference in the costs of my gas and electricity so have I made a mistake in my spreadsheet somewhere or are the tariffs just a way to confuse us and get even more money out of us.

For example, 5551Kwh gas for 90 days

daily SC 90 days at 21.83=£19.65
5551Kwh of gas at .03557=£197.45 total £217.10

first 670Kwh at .0653=£43.75
4881Kwh at .03557=£173.62 total £217.37

and yes, the Kwh tariffs for the second tier are the same as the tariff for the standing charge tariff.

If I do the calculation for 670Kwh the costs are £43.75 and £43.48 for 90 days

So why do they even have the 2 tariffs?
Confused Ron.

Premier_2

The standing charge method of billing was the traditional method, as it ensured all consumers paid the ongoing charges no matter what they consumed.

Then no standing charge tariffs were introduced to allow those who are low users (perhaps because they are in financial dire straits) to reduce their bills by reducing consumption.

As you have found, anyone using all the tier 1 units pays the same (as near as dammit) as someone on a standing charge. But those who use less than the tier 1 limit will save.

There are many gas users who may not reach their quarterly tier 1 limit in summer, but will exceed it in winter.

ronald208

So I suppose to get round, for instance, Npower's gas sculpting it would be better to pay a standing charge than 2 tier. When my present deal with Eon comes to an end I am going to go with a standing charge tariff as I use more than 670Kwh of gas per 90 days and 225Kwh of electricity per 90 days.

I also noticed that some companies have different standing charges and unit cost tariffs so I will have to refine my spreadsheet to take that into account also.
Ron

KimYeovil

It's even closer than that! You missed out day 91. (4 x 90 = 360)

That would be £217.32 to £217.37

(And the final 5p is accounted with day 365)

Premier_2

ronald208 wrote: »

...When my present deal with Eon comes to an end I am going to go with a standing charge tariff as I use more than 670Kwh of gas per 90 days and 225Kwh of electricity per 90 days....

Why?

You can't possibly ever save anything if you agree to pay a standing charge, but you might save something if remain on a 2 tier pricing tariff and don't reach the tier 1 limit.
(e.g. you go away on holiday for 4 weeks in summer, perhaps then need to go and live with an ill friend relative for a while, etc.)

You'll never lose anything from being on a 2 tier tariff (compared to the equivilent standing charge tariff, nPower sculpting for gas possibly being the only exception - I've never quite got my head around that one.)