It can often be complicated to understand the different terms used by gas and electricity suppliers on the energy bills that are sent to customers. However, it is very important to know what they mean. An explanation of the key terms is below, and understanding this information will help customers save money and ensure they have the lowest possible rates from their supplier.
No matter who the fuel supplier is, whether British Gas, ScottishPower, or any of the several other major or independent companies, the terms will be the same. This does make it a little easier to understand them and to even compare prices that are charged by the different companies.
Explanation of Tariffs and comparing rates
Tariff as well as the Comparison Rate (TCR) may be the two most important parts of the energy bill. This will provide the customer information on what their current deal is as well as the cost associated with it. So households can use this information to ensure they have the lowest price possible.
In addition to the Tariff, Personal Projection is very important. All energy suppliers need to provide this, and what it does is try to estimate how much money the customer will need to pay on their utility bills over the next 12 months. It applies to both gas as well as electricity costs. If a household thinks it may be too high, then they can consider switching to a more affordable company.
Many experts, including Citizens Advice, recommend that a few times per year customers take a close look at their Tariff. They should then shop around to see if they can get a better deal elsewhere. People should check with their current supplier for a more detailed explanation of what their current deal is, and then compare this to the other gas and electric companies in the UK.
When shopping for a better rate, always keep in mind that the Tariff Comparison Rate is just a guide, and it is based on average consumption. It will combine the standing charge, unit rate and any discounts into it as well, and a further explanation of those terms are below.
Technical terms on energy bills
Customers will also find the information below on their bill. While these are also important, they are not quite as critical as the tariffs, which are key to ensuring the lowest rates are received.
kWh is kilowatt hours. This can help reflect the usage of electricity in the home or flat. To make this a little easier to understand, for most people, 1 kWh of usage is equal to have a standard light on for 20 – 30 hours.
So that will tell the person how much electricity they are using, but not the cost of it. That is what the Unit Rate is for. This will help determine, based on usage, how much the bills is as it will say what the customer pays per kWh. The key term on the bill to look for is measured in pence per kWh.
Standard Charge is the cost of meter readings and network fees and costs. There is not much a household can do about this expense. All suppliers have it, though some may charge more than others.
If a customer gets their electricity and gas from the same supplier, than the term Dual Fuel rate will be on their bill. This type of arrangement can be beneficial in some cases, as companies may provide the household with a lower rate if they select this option. They will in effect pass on a discount to the customer, and it also makes it easier for the person to pay the bill as they only get one combined statement.
In regards to shopping for a Dual Fuel supplier, the process is the same as when reviewing tariffs. Using this type of arrangement is not required, and people can always decide to continue to get their gas and electricity from different companies.
Using the explanations above, it should be easier for customer to due a comparison of the different suppliers. People should always review the different tariffs available, and pick the company that offers the best rates, while keeping in mind their customer service levels.