Standing charge and unit prices - please help me make sense of this!

MrsNDorman

To whoever can help me.....

My current energy supplier is edf, i have recently been transffered onto their standard variable tarrif and so have been looking to switch. Energy helpline has advised me that i can save £200 a year by switching to First Utility, however......... when i consult the tarrif standing charges and unit prices for both of these suppliers EDF seems the cheaper option so how am i saving £200.

Details as follows

EDF
Electricity standing charge - 14.70
Electricity unit rate - 12.86
Gas standing charge - 23.10
Gas unit rate - 4.08

First Utility
Electricity standing charge - 26.25
Electricity unit rate - 12.611
Gas standing charge - 57.75
Gas unit rate - 2.691

Please can someone help me!

jalexa

MrsNDorman wrote: »

Please can someone help me!

Partly yes.

First of all there is no need to micro-calculate unit prices. Except for very occasional unintended error you can "trust" the comparison website headline cost to be "accurate" for accurate annual consumption entered and the listing order (or % saving) to be approximately accurate for a wide range of consumptions except for very low consumption.

Why then did I say "accurate" and not accurate (and why has your calculation raised a query)?

The answer is that the First Utility tariff is a "deferred discount":eek: tariff where a substantial discount is already deducted from the comparison price. Beware "deferred discount":eek: tariffs if you do not understand the circumstances you could forfeit the deferred discount thereby invalidating the comparison.

The Edf tariff is not a "deferred discount" tariff.

MrsNDorman

Thanks for your reply Jalexa! Im sorry if this sounds stupid but can you clarify what you mean by the deferred discount? Also how do i know if this is the same with other energy suppliers? Thanks.

SwanJon

Always remember to use kWh in the comparison site, not any £ figure.

It might also be looking at splitting the gas and electric by different suppliers.

dude89

MrsNDorman wrote: »

Thanks for your reply Jalexa! Im sorry if this sounds stupid but can you clarify what you mean by the deferred discount? Also how do i know if this is the same with other energy suppliers? Thanks.

It means where companies provide the discount at a later stage. Normally 12/13 months, providing you keep to certain conditions.

From what i remember Npower and atlantic also have deferred discounts.

Also another thing to bear in mind is that eon dont give discounts on final bills.

MrsNDorman

Thanks for the help guys! I have been using my annual usage in KWH on the comparrisons which i understand is the most accurate?
Might give first utility a miss then, think the next cheapest was Ovo so will look into that tomorrow. God why do they make it so difficult!

jalexa

MrsNDorman wrote: »

can you clarify what you mean by the deferred discount? Also how do i know if this is the same with other energy suppliers?

Dude89 has hopefully explained.

"Deferred discount":eek: is not good if you don't understand it. The big risk is if you are on a variable rate "deferred discount":eek: tariff and the rates are increased and you switch before the discount is earned you lose the discount. However if you understand what you are doing, if a "deferred discount":eek: tariff is fixed for about a year, then if you understand the process you can benefit.

To spot whether a tariff has a "deferred discount" you need to scrutinise the tariff details in the comparison. It is not always easy to spot.

You asked about OVO and as far as I can see the OVO tariffs do not feature "deferred discount" so might be a good choice. Neither AFAIAA do Edf tariiffs.