Energy Bill Glossary
Anyone who's ever had to make sense of an energy bill will tell you that they're often filled with jargon, making it difficult to work out just what you owe.
To help you cut through the technical terms and better understand your energy bills, here's a comprehensive glossary of energy terms.
There are various types of energy account. The most common is where you pay for the energy you use in arrears, i.e., after you've used it. This might be on a quarterly basis, by cheque, cash, or by using a credit or debit card, or you might have a monthly direct debit in favour of your energy provider.
This might be for a variable amount, or you might pay a set amount each month.
There are also pre-payment or pay-as-you-go accounts, where you pay for energy in advance using a card or key and a special meter.
With an advanced payment arrangement, you pay a set amount each month for your energy before you use it.
Your account statement (which will either be sent through the post or via email) provides a record of how much energy you have used with your current supplier, details of your tariff, how much you have paid (or pay monthly) and how much you are in credit or how much you owe.
Your account number is a unique number used by your supplier to locate your account. If you phone them with a question or comment, they'll be able to help you quicker if you give them your account number.
Your balance indicates how much you owe, or by how much your account is in credit.
British Gas, EDF Energy, Eon, npower, SSE, and Scottish Power are the six largest energy companies in the UK. They are sometimes referred to as the 'Big Six' and account for around 85% of the domestic energy market.
An energy bill is a statement which tells you how much you owe based how much energy you've used. If you pay by monthly direct debit, your energy company will estimate your annual usage, calculate the cost and divide the amount by 12 to arrive at a monthly amount.
The date the bill was issued to you.
Your bill will tell you for what period of time the charges were calculated. For example, if the bill period is April 1 to June 30, then the amount you owe is for the energy you used during that time.
This relates to the amount of energy created by burning the gas you use.
A capped energy tariff is one which guarantees the price per unit you pay for gas and/or electricity will not exceed a certain amount for a set period of time.
Cold Weather Payment
The Cold Weather Payment pays households £25 if the weather drops below zero degrees celsius for seven consecutive days (or is forecast to do so), between November and March. Low income households are usually eligible for this payment.
Read more about Cold Weather Payments here.
A 'collective switch' is when a group of people get together to negotiate a better energy deal with an energy supplier. The switch itself is usually facilitated by a third party, such as MoneySuperMarket.
A measure of how much gas and electricity you have used, or 'consumed.'
If you pay for your energy via Direct Debit, the amount you owe is taken automatically from your bank account, so you'll never miss a payment. You must make sure you have money in your account though, as payment will be taken regardless - which could lead to overdraft charges from your bank if you don't have the available funds.
Direct Debit payments are either made on a monthly, quarterly or variable basis.
If you use less energy than you've paid for in the month or quarter, your account will go into credit. With variable payments, you pay for exactly what energy you used at the end of a fixed calendar period, be that a month or a quarter.
Energy suppliers offer discounts as incentives to make you manage your account a certain way. You can get discounts for buying both your gas and electricity from the same supplier (dual fuel discount), by paying via Direct Debit and by managing your account online.
A dual fuel discount or tariff is where you get both your gas and electricity from the same supplier.
Dual Fuel discount
Some energy suppliers offer a discount on your energy bills should take on a both a gas and electricity tariff from them.
An economy 7 electricity tariff gives you cheaper energy during a 7-hour period - usually through the night. The energy is held in 'storage' units for use throughout the day, when conventional energy supply is more expensive.
An electricity tariff which gives you cheaper energy during a 10-hour period. The actual hours will vary from one supplier to the next. As with the Economy 7 tariff, the energy is held in 'storage' units for use throughout the day, when conventional energy supply is more expensive.
End of fixed term notification
This is the notification you'll receive when your fixed-term tariff is coming to an end. You will usually receive this between 42 and 49 days prior the end of your tariff. This should be taken as a signal to start looking for another fixed tariff, otherwise you'll be rolled over onto your suppliers' standard tariff, which will be more expensive.
If your fixed tariff carries 'exit' penalties for moving to another tariff during the term of the fix, these penalties (or fees) will not apply once you have received the end of term notification.
Estimated meter reading
Sometimes your energy supplier will make an estimated reading of you meter and bill you accordingly. This estimate is based on your energy consumption in the past. If your provider doesn't have your consumption history, the estimation is based on national averages.
By contrast, an 'actual meter reading' is based on a recent meter reading and will be more accurate.
To ensure you are billed accurately, it is important to regularly give updated meter readings to your energy supplier. This can be done online, over the phone or by post.
Exit fees are charged by energy suppliers to account holders if they cancel their contract before the end of its fixed term. Fees can vary from £10 - £30 per fuel. They are not charged within 42 days of the end of the fix.
Fixed monthly direct debit
This is when the amount you pay each month via direct debit is fixed at an agreed number. This does not mean your energy cost per unit cannot go up. If the supplier puts its price per unit up, they will notify you that you monthly direct debit will be going up, as required.
A fixed tariff is where the gas or electricity suppliers promise not to increase your cost per unit for a given period.
This can be a good way to protect yourself against price hikes, but there is a risk because if your energy provider reduces its variable rate prices, you will not benefit.
Green energy refers to energy from a sustainable source, such as solar power, hydroelectric power, wind power and biomass.
Many suppliers offer green energy tariffs which either guarantees that for every unit of energy you use, the same amount of green energy will be generated, or that the extra amount added to your bill for green energy is invested in renewable energy projects.
Each household is classed as a low, medium or high energy user. High energy users are typically larger families living in detached homes with three or more bedrooms.kWh (Kilowatt hour)
A kilowatt hour (kWh) is a unit of energy which is equal to one kilowatt of power expended for one hour. On your energy bill you'll see how many kWh of energy you have consumed.
Your bill will break down your kWh usage over the bill period. It'll also tell you the cost of the energy per kWh, allowing you to see how your total bill is calculated.Low user
Low energy users consume 1,650 kWh of electricity and 10,000 kWh of gas a year, according to Ofgem figures. Typically, low users are single people or couples living in one bedroom flats.Medium user
Medium energy users are more likely to be a couple or small family living in a semi-detached house. Medium energy users consume 3,300 kWh of electricity and 16,500 kWh of gas a year, according to Ofgem.MPAN
Your unique, 21-digit electricity 'meter point administration number'MPRN
Your unique gas meter number, which remains the same even if you switch suppliers. It stands for meter point reference number.No Standing Charge
(NSC) You may see the abbreviation NSC on your bill - this means that your tariff does not include a standing charge. If a tariff has a standing charge then you pay a set amount for both the supply and the energy you use.
With an NSC tariff you only pay for what you use, but the standing charge is usually built into the cost per unit for a certain amount of units, until the equivalent standing charge is paid, then the rate lowers.Ofgem
The Office of the Gas and Electricity Markets (Ofgem) is the regulator for the energy industry, and works to protect consumers.Ombudsman
If you complain to your energy supplier about any aspect of your account and they don't resolve it satisfactorily within eight weeks, you can take your complaint to the ombudsman service, which is independent of the energy industry and regulator Ofgem.Online tariff
Online energy tariffs give you a discount on your bills for managing your bills and payments on the internet.'Payment received on'
This shows the date and amount you last paid to your energy supplierPayment slip
Your bill may include a payment slip at the bottom, in case you want to pay your bill at the bank, post office or by post.Plan/tariff name
The name of you current energy plan or tariff. This can be useful to have to hand if you're making an application to switch to a new supplier.Pence per kWh
The amount you are billed for each kWh you consume. Multiply the number of kWh you have consumed by the pence per kWh to calculate what you're being charged for the energy you've used.Personal projection
A personal projection is a personalised estimate of how much energy you will use in the coming months. It takes into account your energy usage, how you pay your bills and any discounts you may receive.'Previous reading'
Your last meter reading. Deducting your previous reading from your current reading will show how much energy has been used between the two.Price increase notice
This notice is sent to inform you of any price increases to your tariff. The notice will be sent 30 days before the change. You have the right to end the contract without paying a penalty, providing you let your supplier know before the price increase is implemented.Recent reading
Your most recent and up-to-date meter reading. Subtracting your previous reading from your recent reading will show how much energy you have used between the two readings.Standing charge
Standing charge is the amount you pay to your supplier for having access to gas and electricity. The amount you pay on top of that is for the usage of the gas and electricity.Standing order
A standing order is an arrangement which automatically sends payment from your bank account to the energy supplier as often as is necessary. The amount sent is set by you and can be changed by you alone.Supply number
Your energy tariff dictates how much you pay for your energy by setting the price you pay per unit and may offer discounts for things like dual fuel and account online management.Tariff comparison rate (TCR)
A tariff comparison rate acts as a starting point when comparing multiple tariffs. It replicates a medium level of energy use of a standard household, with the aim of giving you an idea of what you're expected to pay.Unit(s)
A measurement of how much energy has been used. Units of gas and electricity used are converted into kilowatt hours.Variable direct debit
See 'direct debit'VAT
Value Added Tax (VAT) is added to your energy bill at a rate 5%. VAT is charged on other goods and services at a rate 20%.Warm Home Discount
This is a government scheme designed to assist those in the winter months who struggle to pay their energy bills. A discount of up to £140 is available to those who are eligible.
Read more about the Warm Home discount here.Winter Fuel Payment
The Winter Fuel Payment is a government scheme designed to help older people who rely on a limited retirement income pay their energy bills. The payment is made annually to help with heating costs.
Read more about the Winter Fuel Payment here.Winter uplift
Winter uplift allows energy suppliers to take a percentage extra through direct debit, usually around 20%, over the course of the year to help cover the costs of pricier winter bills.