Cutting through the Jargon – Understanding Your Electricity Bill
Do you have trouble understanding everything on your electricity bill? Don’t worry! You’re not alone! YouGov research found 75% of people find energy bills confusing, and only 4 in 10 could understand the calculations on their bill.
Energy bills can seem complex at first glance but its well worth taking the time to understand the basics, as understanding your energy use, and how they charge you for it, can save you money. So here I’m going to try to explain the different parts of your electricity bill. The blue numbers on the image correspond with the key below.
1: The contact details for your supplier – usually found in the top right hand corner of the front of your bill.
2: Your ‘Customer Reference Number’ (also called an account number) – unique to you and you will need to provide this anytime you contact your supplier.
3: The date your bill was issued.
4: The ‘Billing Period’ – the time period for which you are being billed for (usually on a monthly, 3 month or 6 month basis).
5: The amount you paid on your Previous Bill (the next line states the date you paid it).
6: The cost of the electricity you have used since your last bill. This is the cost before VAT is added. In this instance it is an estimated bill (see point 12 for more on estimated bills).
7: 5% VAT is charged on electricity supplied to domestic houses. If your vat rate is higher than this then you should contact your supplier immediately.
8: The total amount you owe for this period including VAT. Usually on the other side of the bill it will show how this figure was reached.
9: Your ‘MPAN’ number is a unique number that identifies your Meter. This is the number your supplier uses to charge the correct meter, and customer.
10: Your ‘tariff’(can also be called your Plan) dictates the rate you pay for your electricity and other terms and conditions, e.g. Timescale.
11: The meter reading at the beginning of the period for which you are being charged.
12: The ‘reading’ for the end of the period for which you are being charged on this bill. The ‘E’ in brackets means that it is an estimated reading and so could be lower or higher than the actual usage. If the estimate is too low, you’ll be charged for the difference on your next bill. It is good practise to take a meter reading to see if the estimated reading is close to the actual and then you can work out the difference.
13: The amount of electricity you have used in this period. It is worked out by the ‘last reading’ minus the ‘previous reading’ and is given in units of kWh.
14: This shows that the first 222kWh of electricity you use cost more (per kWh) than the electricity used after this. This is normal practise for your electricity supplier.
15: Charges for energy used is the total amount you owe before VAT in included (see points 7 and 8).
16: This explains how your estimated readings are worked out.
17: Your energy supplier can provide your bill in various other forms if needed such as large print, Braille or audio tape.
18: A payment slip is provided if you wish to pay your bill at the bank or by post. Another way to pay your bill is by monthly direct debit.
Your annual statement
Once a year, your energy supplier will send you a statement detailing the name of your tariff, how much energy you have used over the last year, how much you’re likely to pay over the next year, and any discounts, premiums or terms and conditions on your tariff. This is very useful if you want to switch suppliers as it’s much more accurate than a quarterly bill when calculating whether another supplier could be cheaper.
Greener Kirkcaldy can help
Our energy advisors can give you advice to help you reduce your energy use and make your house more efficient – saving you money and keeping you and your family warm.
Our Cosy Kingdom service offers free and impartial home energy advice. One of our energy advisors can come to your home and give you one to one help and advice.
For more information or to arrange a free home visit get in touch by calling 01592 858458, emailing firstname.lastname@example.org or pop into our High Street Hub, 254a High Street, for a chat Wednesday to Saturday, 10am-4pm.|