fuel comparison sites

smk77

Lets say Person A lives in an old 4 bed house that costs loads to heat. In the summer their heating costs will be no more than Person B living in an efficient 4 bed modern house.

In the winter, a higher proportion of Person A's energy bills will go heating their property compared to Person B. In this scenario, Person A needs a energy supplier who moves to a lower rate after a low number of units of fuel has been used.

Price Comparison sites ask for either:

1. monthly spend
2. Annual spent
3. Annual consumption
4. last quarterly bill


Lets say Person A and Person B have the same annual consumption (perhaps person B has a large family and therefore use more electricity throughout the year). Whilst both Person A and Person B would enter the same details into the price comparison sites and get the same results, it's unlikely that that supplier is best for both usage types (i.e. heavy winter usage and consistent annual usage).

Therefore, surely price comparison sites would be better if they took into account quarterly usage figures?

Premier_2

Most suppliers spread out their tier 1 requirement equally over the year
Only nPower gas has a unique sculpting system that I know of - and so yes, comparison sites may make small erros depending on usage with nPower as the comparison sites do not cater for sculpting (afaik).

Most users will use at least the full tier 1 alootment in any one quarter, so it would make no difference.
Only really low users (such as empty/second homes) and some gas users in summer (those who use gas only for heating) may not use the full amount of tier 1 units. The difference for these really low users will be very little in cost terms (as they pay very little anyway).

rabbitmumu

I don't agree entirely. I was a low user Npower customer. It's my main home and gas was used for heating and water. According to the price comparison web site, I was charged about £140, actual bill £230 for the whole year. In percentage terms, that's 64% more.

Premier_2

rabbitmumu wrote: »

I don't agree entirely. I was a low user Npower customer. It's my main home and gas was used for heating and water. According to the price comparison web site, I was charged about £140, actual bill £230 for the whole year. In percentage terms, that's 64% more.

As I said, the comparison sites do not cater for nPower's unique gas sculpting system.

... but I'd be interested in your figures that have such a large difference; it could prove most useful to others thinking of switching to nPower

Edit: The reason I ask is that for an annual quoted cost of £140 which the comparison site would assume is used equally throughout the year, as it would also assume the tier 1 was distributed equally throughout the year, then based on the nPower standard tariff paid monthly by DD, this would equate to about 2530kWh p.a. (I took Eastern region - not sure if nPower gas prices change by region)

Details of tariff:
tier 1: 7.616p/kWh for initial 1143 kWh per qtr
tier 2: 2.798p/kWh for remainder

Discounts: £52.50p.a. DD discount

Now assuming everything was equally distributed, then all units would be charged at the higher tier 1 rate anyway since the annual usage of 2730kWh is less than the tier 1 annual amount of 4572kWh (4 x 1143kWh).
Calculated cost = £140.18

Now as far as I understand it (which isn't very well!), nPower sculpting actually distibutes the tier 1 units as follows:

Nov, Dec, Jan, Feb – 882 units charged at primary rate per month
Mar – 272 units charged at primary rate per month
Apr, Oct – 271 units charged at primary rate per month
May, June, July, Aug, Sep – 46 units charged at primary rate per month

Which makes the annual total – 4572 units

Now the only way I can see the cost changing is by it reducing from the quoted amount.

e.g. lets take an extreme. You only used your gas for heating in August.
That would result in just 46 units at the tier 1 rate

So your actual annual bill would amount to just £20.51


I can't see any way it could actually cost you more than the amount quoted. :huh:

smk77

Premier wrote: »

Most suppliers spread out their tier 1 requirement equally over the year
Only nPower gas has a unique sculpting system that I know of - and so yes, comparison sites may make small erros depending on usage with nPower as the comparison sites do not cater for sculpting (afaik).

Most users will use at least the full tier 1 alootment in any one quarter, so it would make no difference.
Only really low users (such as empty/second homes) and some gas users in summer (those who use gas only for heating) may not use the full amount of tier 1 units. The difference for these really low users will be very little in cost terms (as they pay very little anyway).

thanks for the reply...makes sense. As long as you use tier 1 then it makes no difference when you use the rest of the fuel..All remaining units are charged at the higher rate.

rabbitmumu

smk77 wrote: »

thanks for the reply...makes sense. As long as you use tier 1 then it makes no difference when you use the rest of the fuel..All remaining units are charged at the higher rate.

Have I misunderstood anything here? The right way around should be : All the remaining units are charged at a lower rate and Tier 1 are charged at a higher rate (at least for Npower).

Because of the way how Npower allocate their Tier 1 (i.e. very high during winter months and low during summer months), for a low user like me, almost ALL of my gas throughout the year was allocated to Tier 1. And last year's price Tier 1 was 3x the price of Tier 2.

So if you put the same annual usage into a price comparison web site, they will only calculate your bill by taking an average - i.e. same consumption every month which is unlikely in real life. As the result the price comparison web site will "allocate" more of your units to Tier 2 which is cheaper. So they will show you a lower annual bill. Whereas in reality if you are a low/ moderate user, you will pay more because most/all of your units are allocated to the more expensive Tier 1.

@ Premier - I will try to dig out last year's file and show the calculations here. That's why I am so against using Npower for gas especially for low users.

But for background info (approx numbers) I used around 3000kwh from mid Dec 09 to mid Dec 2010) but 2500 was used in the first 3 months when we first moved in and didn't have a clue about Npower. Only 250 kwh was used from March till end of Nov before the heating was switched on in Dec this year. And guess what - out of that 2500 units, only 20 was allocated to Tier 2 and at that time Tier 1 was 3 times more expensive than my Tier 2... that's why I switched everything off after receiving the bill in mid March and only had it on for 5 mins everyday for shower...

smk77

rabbitmumu wrote: »

Have I misunderstood anything here? The right way around should be : All the remaining units are charged at a lower rate and Tier 1 are charged at a higher rate (at least for Npower).

no you haven't. I meant lower rate.

rabbitmumu

Premier wrote: »

I can't see any way it could actually cost you more than the amount quoted. :huh:

I understand parts of what you wrote but don't really get it. Not sure if you have seen my latest update either. But in simple terms if i am just looking at the winter 3 months bill using 2500 kwh and 20 kwh was in Tier 2 (have my bills in front of me) :

(2300kwh x 0.08366+ 200 * 0.02488) *1.05 VAT = just under £210. Plus 8 months summer usage of a total 300kwh all Tier 1 = £ 20+. Total £230 already ignoring the Dec just gone.

I am ignoring the £50 discount here as I would still be worse off with Npower. So I switched to other supplier soon after I received the £210 gas bill.

Premier_2

rabbitmumu wrote: »

I understand parts of what you wrote but don't really get it. Not sure if you have seen my latest update either. But in simple terms if i am just looking at the winter 3 months bill using 2500 kwh and 20 kwh was in Tier 2 (have my bills in front of me) :

(2300kwh x 0.08366+ 200 * 0.02488) *1.05 VAT = just under £210. Plus 8 months summer usage of a total 300kwh all Tier 1 = £ 20+. Total £230 already ignoring the Dec just gone.

I am ignoring the £50 discount here as I would still be worse off with Npower. So I switched to other supplier soon after I received the £210 gas bill.

The comparison site would assume you used the amount equally throughout the year ... as it would similarly assume tier 1 units were equally spread throughout the year.
That assumption would result in a higher price since it would assume you would be charged for all units at the higher tier 1 rate (since your annual usage is so low, it is less than the annual tier 1 limit)

Edit: you can only possibly win if you plan to switch so regularly to take advantage of the low tier 1 limit in summers offered by nPower, and the lower tier 1 rates offered elsewhere in winter (due to others not scuplting).
That requires a lot of work switching, especially since it can take 1-2 months to switch.
... and then that's also where the annual discount comes in as you probably miss out on that if you switch mid-year. That discount alone represents a saving of about 1/3 of your annual cost.

You probably suffered not a double whammy, but a treble whammy. :eek:
1. You suffered the higher cost of nPower over the winter months
2. You lost out on nPower annual DD discount
3. You then suffered the higher cost of competitors over summer months. (due to competitors having subtantially more than 46 units per month tier 1 limit)