Watt’s up? A simple guide to demystifying your energy bills
Have you ever looked at your utility bills and wondered what it all means? Are you confused about ‘standing charges’, VAT rates and the different suppliers and tariffs available? Whether it’s your first time living independently, or if Scotland’s utilities system is new to you, here’s a quick guide to decoding and understanding your household bills.
Your utility bill comprises of your household electricity and gas consumption, and one of the first things you should do when moving into a new property is to check your utilities supplier and send in a meter reading. This will prevent you from being liable for charges that were incurred before you moved into the property. You can find out who your suppliers are by either asking your landlord/letting agent or online with your postcode at: https://www.findmysupplier.energy/. You can also find out how to take a meter reading on a standard meter here. Smart meters, on the other hand, automatically send readings to your supplier and can give you near real time information on your energy usage. Use this tool to check what type of meter you have if you’re unsure: https://smartmetercheck.citizensadvice.org.uk/scotland.
You should also have a Meter Point Administration Number (MPAN) for your electricity and a Meter Point Reference Number (MPRN) for gas from your landlord or you can find it quoted on your bills. Your full MPAN is a 21-digit number that begins with an ‘S’ and is often printed across two rows in the format ‘S-XX-XXX-X’ in the first row and a 12-13 digit number in the format ‘XX-XXXX XXXX-XXX’ across the bottom. This number is fixed to your property and is used to identify your property’s electricity supply as well as contain information about tariff type, location and the network operator. Your MPRN is a 6–10-digit number used to identify the gas supply to your property and may be preceded by the letter ‘M’. You’ll need an MPAN and MPRN number to switch energy suppliers.
Another number to be aware of is your meter serial number. Unlike your MPAN and MPRN which are tied to your property, your serial number is specific to your energy and gas meter and is sometimes referred to as a meter ID. You can find the serial number (S/N) on your meter and on your energy bills. It’s a good idea to cross check these numbers to make sure you’re not being inadvertently billed for the wrong meter. If you don’t have smart meter, you should also take and send meter readings every month to ensure you’re paying the right prices for your usage.
If you’re on a ‘dual fuel tariff’ plan, you will have a single supplier for both your electricity and gas. In such cases, you may receive a single itemized bill, combining both your gas and electricity charges, and some of the best deals can offer you cheaper energy prices for using the same supplier for both. Some tariffs, such as the Economy 7 plans, are multi-rate offering you different prices for on and off-peak times which can help you save on your bills, if your consumption is higher in the nights. But the exact deals vary by region and usage, and you can compare your options using price comparison sites such as the one here: https://www.uswitch.com/gas-electricity/.
Your gas and electricity bills will comprise of a unit price, i.e. the price paid per unit of energy/gas consumed, and a standing charge. The standing charge is a fixed daily charge that is incurred regardless of whether any energy is used and helps cover the cost of supplying the utilities to your property. Different suppliers offer different standing charges and unit prices, but there is a price cap on the overall amount you can be charged. You can find more information on the price caps per region and payment method here: Get energy price cap standing charges and unit rates by region | Ofgem
Another aspect to consider are fixed versus variable tariffs. Fixed tariffs offer the same standing charges and unit prices for the duration of your contract (typically 12 months). Variable charges on the other hand, are revised every three months (in January, April, August, and November). Fixed rate plans can help you budget by giving you certainty over the prices you will be paying but might work out to be higher than the standard variable rates, so it is worth checking your annual estimates for both options. You might also be able to save on your energy bills by setting up a direct debit with an energy provider.
In addition to your standing charge and unit price, your itemized energy bill will also contain a VAT (Value Added Tax) of 5% for domestic consumers. If your property was previously a commercial let (such as holiday or short-term lease), it is also important to check that you are now being charged residential rates for your unit prices, standing charges, and tax, and that your landlord has switched over from a commercial to residential utility plan. Commercial rates are much higher than residential prices, and include a 20% VAT and climate change levy, which are not applicable for domestic users. Hopefully, this blog helped clarify some of the key components of your energy bills and the major types of tariffs available. If you’re struggling with your energy costs or the cost of living, and would like more specific advice on your situation, you can make an appointment to speak to a money advisor from student services at [email protected]