Making sense of your energy bill

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You know that awkward moment that arrives at the end of a meal in a restaurant? The moment when you get the bill and have to start working out who ordered what? Awkward it may be, but at least the bill itself is easy to understand.

When you get a bill for a meal everything is laid out logically, next to how much it cost. If you don’t understand a particular item, you can just ask the waiter.

If only the same was true of your energy bill. Take a look at your last energy bill. We don’t mean the kind of quick glance you give it before putting it away in a drawer and hoping your payments haven’t gone up by too much. We mean a proper look. And as you look at it ask yourself: ‘How do energy bills work?’… ‘How do I calculate my electricity bill?’.

You may well wonder why you even bother reading your energy meter if the figures you provide than get translated into German, then French, then Mandarin before being turned back into something which is presumably supposed to be English?

Reading and understanding your bill means getting some idea as to whether you’re being charged too much for your gas and electricity. What does it mean if your energy bill is in credit? How do energy bills work? The fact that, according to Ofgem, there are currently 62 different companies providing gas or electricity (often both) in the UK means two things:

  1. You can shop around for the best possible deal and switch to it with ease.
  2. There are 62 different ways of setting out an energy bill.

Although each provider is different, the good news is that there are some features which crop up on all energy bills.

Checking your energy bill carefully helps with the following:

● Keeping tabs on how much energy you’re using and whether you need to take action to use less (spoiler alert – virtually everybody could take steps to use less energy)
● Making sure that the readings are correct rather than being estimates, and that you’re not paying too much or too little.
● Seeing if the provider has quietly slipped you from that value for money fixed tariff they made such a big deal about 12 months ago and onto their less affordable standard variable tariff.

The features you’ll find on your bill include the following:

The meter reading

The meter reading is the all-important measure of just how much gas and electricity you’ve actually used. There might be a letter next to the confusing looking row of numbers, and it’s important to know what that letter means.

  • ‘A’ means that this is an actual meter reading, taken at the time the bill was put together
  • ‘C’ means that it’s a meter reading you provided yourself
  • ‘E’ means that it is an estimate, which means the energy provider has taken a guess as to how much energy you used since the last bill

If they’ve estimated too much then you’ll be charged for power you haven’t used. If the estimate is too low then you will be asked to pay less than you should be doing.

Don’t be tempted to keep quiet about an under-estimate.

We put that bit in bold because we understand, when you’ve got a whole pile of bills to deal with, that it can seem like a good idea to let an under estimate slide and count your blessings. Eventually, however, your energy provider is going to get an accurate reading and when they do you’ll find yourself owing a debt which could, over time, build into something substantial. If the estimate is out in either direction, ring your provider and give them an accurate reading.

The tariff

The name of the tariff will come in extremely handy if you start looking for a cheaper tariff. Also, if you see you’re on a provider’s standard variable tariff then there’s every chance you’re paying the maximum they charge for energy.

The TCR

This is the ‘tariff comparison rate’ and it details how much you pay per unit of energy when everything such as standing charges or special offers have been taken into account. Without going into too much depth regarding the maths involved, it’s safe to say the TCR is a quick way of comparing different tariffs as it captures how much per unit the average customer would be paying on a particular tariff.

Payments

If you pay by direct debit then the payment details will show how much the direct debit will be and when it will come out of your bank account. If you pay when billed, then the amount will be the full amount of the bill, and the date will be when it has to be paid.

Energy use

This is where the bill details how many kWh (kilowatt hours) you’ve used over the billing period. This may not mean much on its’ own, but many bills now let you compare your usage with the same time last year. If it’s gone up significantly you can start trying to find out why, and if it’s gone down you can feel all smug about the energy efficient appliances you invested in.

MPAN and MPRN numbers

Locating your MPAN or MRPN numbers on a bill is very useful. These are unique numbers, called the Meter Point Administration Number (MPAN) for electricity and Meter Point Reference Number (MPRN) for gas, which are linked to your meter and property, not your supplier. Knowing them makes things simpler when you decide to switch suppliers.

Some bills show them clearly, others hide them away, but you can look out for the following:

  • MPAN – starts with an ‘S’ and has 21 digits in total
  • MPRN – has just 10 digits
    Note: neither of these numbers is your customer reference number, which will be every clearly labelled.

By the time you finish reading (and understanding) your bill, you should have an idea of how much energy you’ve used, whether this is a normal amount for you, and how much it’s cost you.

Armed with these simple facts you can come to WeFlip and make sure that the next bill you receive shows that you switched to a better value tariff out there.