Energy Confusion

Ali_JS

Hi, I am new to this so here goes. I would love someone to help defog this issue for me. I'm so confused with Energy bills, I don't understand why we can talk about them as units - 20p electric, Standing charges 25p -  4p gas Standing charges 25p - I get confused about the typical usage the cost per household the average. I know what is typical, or what is average. we have a two bedroom ground floor flat and I cant tell if I am over paying or underpaying. How do I find out the other tariffs or ever what the actual price cap tariff is.

Any help or ways of looking at this problem would be greatly appreciated 

spot1034

Always compare unit rates and standing charges. It is amazing how many people, when asked the question 'how much do you pay for your gas/electricity?'  answer by giving the amount of their monthly direct debit. 

BeerSavesMoney

spot1034 said:

Always compare unit rates and standing charges. It is amazing how many people, when asked the question 'how much do you pay for your gas/electricity?'  answer by giving the amount of their monthly direct debit. 

I think the reason for this is because most energy companies hide this when getting a quote. You usually have to click on something additional to get those rates when personally I think it should be a requirement to show clearly without any extra clicks.

JJ_Egan

Its how much you use not any estimate .

Your usage from your account or past meter readings  .

Multiply  unit rate by amount used per year  add 365 standing charges .

Gives you a better idea  . Divide total amount by 12 to get a Direct Debit amount based upon old usage .

Key is prices as a 4p unit is better than a 6p unit not matter what is estimated , as they are the real prices .

GingerTim

JJ_Egan said:

Its how much you use not any estimate .

Your usage from your account or past meter readings  .

Multiply  unit rate by amount used per year  add 365 standing charges .

Gives you a better idea  . Divide total amount by 12 to get a Direct Debit amount based upon old usage .

Key is prices as a 4p unit is better than a 6p unit not matter what is estimated , as they are the real prices .

It feels like we a need a sticky 'how to calculate your energy bill' post along these lines given that there seems to be quite widespread misunderstanding over direct debits.

Ali_JS

I also wish all the units were shown upfront. I watch Martin talking about £1,700 for typical use. We are under that ... Just. but we don't really turn the heating on so I don't know if I am on the best possible tariff. is there a place that shows all the providers and the unit prices that they offer. 

QrizB

"Typical use" is 12000kWh of gas per year and 2900kWh of electricity. That's Ofgem's dual-fuel average customer.

Ali_JS said:

Is there a place that shows all the providers and the unit prices that they offer.

What you describe is an energy comparison website. There are many. You could try:

https://energycompare.citizensadvice.org.uk/

https://switch.which.co.uk/

https://clubs.moneysavingexpert.com/cheapenergyclub

BeerSavesMoney

You should be able to view your current unit prices by logging on to your energy suppliers website or looking at a recent bill?

Do you submit regular meter readings?

Gerry1

QrizB said:

"Typical use" is 12000kWh of gas per year and 2900kWh of electricity. That's Ofgem's dual-fuel average customer.

Just to confuse things, Ofgem used 3100kWh when calculating the electricity cap !

Gerry1

Think of it like running a car.  Even if only parked on the street, you probably pay annual Vehicle Excise Duty of £140 or more, which is equivalent to the Standing or Daily Charge.  Then if you drive somewhere you pay around £1.50 per litre at the pump for petrol, which is equivalent to buying kiloWatt hours of gas or electricity from the meter.

Electricity meters measure kWh directly.  Gas meters are slightly more complicated because they measure the volume of gas used in cubic metres or hundreds of cubic feet; the readings have to be number crunched to convert them to kWh.

If you pay by Fixed Direct Debit, your bill is not the same as your DD amount.  It's like flat sharers putting money into a kitty in a jam jar to buy food; it's not All You Can Eat, if the supermarket bill exceeds the amount in the kitty then the flat sharers will have to have a whip round to make up the deficit and then they'll have to increase their weekly contributions.  The alternative is that they split the bill each time they go to the supermarket then there's no problem with the kitty overflowing or not big enough to pay the bill.

The cap is a limit on the daily charge (24.9p for DD payment) and the kWh rates (they vary regionally, London DD rates being 23.5p for single rate electricity and 4.98p for gas).

Your rates will probably be a bit lower because there's also a cap on the annual total cost: if a supplier sets the daily charge to maximum then the kWh charge must be set slightly below the maximum, and vice versa.

The total cost cap varies regionally, the national average working out at £1277 for average consumption.  However, just like FDD it's not All You Can Eat, so if you use more than average then you'll pay more than the total capped price for your region.

Ali_JS

Thank you all for your help, I really appreciate it. It is really rewarding when you find support, So thank you all. 

Do you recommend smart meters? Are they helpful or just a way of checking how much you have spent?