A guide to home energy bills
You’ll be sent an electricity or gas bill by your energy supplier on a regular basis – typically every month or every three months, although in rare cases you may only receive a bill once a year. Your supplier sends this bill to detail how much you owe them for the energy you’ve consumed, and also uses the opportunity to outline some other key information about your energy account.
The following guide to electricity and gas bills should help you develop a better understanding of your energy bills, which should help you make informed decisions when it comes to switching tariffs and finding the cheapest deal for your household.
What are the key aspects of an energy bill?
While the specific format of your energy bill can vary between suppliers, all suppliers will include the following key information in their bills:
- The name of your supplier: usually found at the top of your bill in the form of a logo.
- Contact details for your supplier: your supplier should give you a variety of options for contacting them – typically phone, email or post.
- Your billing address.
- Customer reference number: also called an account number, this number uniquely identifies you to your current supplier and changes when you switch suppliers. You’ll need this whenever you communicate with your supplier to help speed up any queries.
- Bill date: this is the date your supplier issued the bill.
- When to pay: suppliers usually include the date by which you need to pay your bill. The length of time you are given between receiving your bill and making a payment varies between suppliers.
- Total cost of your bill: suppliers will prominently display the total cost of your bill for the billing period specified (this will not include any additional payments you may owe your supplier due to debt you’ve previously accumulated).
- Billing period: these dates indicate the period covered by your bill. It should start on the day after your previous bill period. Your supplier cannot bill you for anything longer than a year ago unless they have previously tried to get in touch with you unsuccessfully. Likewise, if you haven’t received a bill for over a year and have tried and failed to contact your supplier, you can dispute any outstanding bills you are sent.
- Your last bill or payment: this section indicates how much you paid on your last bill. This reminder can be used to monitor the difference between bills. Your bills typically fluctuate with the seasons, and will be affected by your consumption habits. However, if you notice a drastic change in price, your tariff may have expired. You should contact your supplier to make sure, and switch to a cheaper tariff as soon as possible if this is the case.
- Balance before this bill: if you’re in credit or debt to your supplier and pay by direct debit you may have either a positive or negative balance left over from the previous bill.
- Bill cost before VAT: this is the cost of your usage before VAT is added on. Your supplier will use either estimated or accurate readings, and will specify this.
- Amount of VAT added: indicated as a percentage, your supplier will specify the amount of VAT that has been added to the cost of your usage.
- Total amount to pay: this is the total amount you’ll need to pay your supplier, with VAT added and any discounts applied. It should be the same as the figure printed prominently higher up in the bill, as long as you’re not in credit or debt with your supplier. If you are in either of these situations, the amount may be slightly lower or slightly higher respectively.
- Additional information: your supplier will include information about their products, such as new or expiring tariffs and special offers. For example, your supplier may offer you a cheaper tariff and outline the potential savings.
- Supply number MPAN or MPRN: this is the number that uniquely identifies the property the bill refers to. The MPAN refers to electricity while the MPRN refers to gas. You’ll need these numbers if you wish to switch suppliers.
- Tariff Comparison Rate (TCR) : similar to the APR on loans and credit cards, the TCR should make it easier to compare tariffs across the market.
- Tariff Information Label: this label should include all the key information about your tariff.
- The name of your tariff: naming conventions differ between suppliers. You’ll need to know the name of your tariff when switching as it will help you compare prices.
- Reminder that you can switch suppliers: your supplier should also include information on how to do so.
- Your meter readings: this is the amount of energy you have used during the billing period. This figure is either estimated (indicated by an E on your bill), accurate (A) or provided by you (indicated by a C for customer). Accurate bills – or those based on readings provided by you – will help ensure you only ever pay for the energy you use, so it’s worth regularly sending meter readings to your supplier.
- Breakdown of bill: your supplier will display how your bill is broken down in terms of unit rates and standing charges.
- Information about calculations: your supplier should indicate how they have calculated your estimated reading, and which calculation they have used to convert gas units to kWh.
- Information for customers with special requirements: if you have any specific requirements for your energy bill, your supplier should include a number you can call. You might, for example, request your bill in Braille, large print or audio tape.
- Information about emergencies: your supplier may include a number you can call in an emergency, and may include advice for what to do.
- Payment slip: you can use the payment slip to make a cash or cheque payment.
If you think there might be something wrong with your bill, or if you don’t understand an aspect of your bill, you can contact your supplier who should be able to help you.
What charges make up a typical household energy bill?
Your electricity and gas bill will be calculated using the following charges and discounts:
- Unit rate.
- Standing charge.
- VAT at 5%.
Your supplier includes several different elements within these charges, although they are not typically specified on your bill. These elements are explained below:
- Cost of wholesale energy: most suppliers buy electricity or gas from the wholesale market, although some suppliers do generate their own energy.
- Supply costs: these are costs associated with running a business, including sales, administrative costs and billing costs.
- Profit margin: your supplier includes their profit margin within the cost of your bills.
- Distribution charges: this includes the cost of building, maintaining and operating the gas pipes and electrical cables that deliver energy to your home.
- Transmission charges: suppliers need to maintain and operate high voltage transmission networks. Although domestic customers do not use these networks, suppliers are charged to use them and pass on some of the cost to their domestic energy customers.
- Environmental costs: this is the cost of government schemes designed to help save energy and reduce carbon emissions. Customers’ bills cover schemes such as the Warm Homes Discount.
- Other costs: further costs include the installation and maintenance of meters, storing gas and balancing the electricity network.