Energy Prices, Energy Tips

When we do our weekly shop, we want every item to be scanned so that we pay the right price. We wouldn’t be happy if the cashier glanced at our groceries and guessed the total cost. So why do we put up with estimated bills from our utility suppliers? Making sure that you provide regular readings will ensure that you are accurately charged and this could save you money!

Why you should read your gas and electricity meters

Providing regular meter readings means that you will only be billed for the gas and electricity that you actually use. The genuine figure may be higher or lower than the estimate, but in either case it’s beneficial to be charged for the correct amount – you don’t want to run up a huge energy bill by making underpayments, nor do you want to be paying more than you need.

Estimated readings (which will usually be marked with a letter ‘E’ on your bill) are based on historic or average data. So if you’ve just become the sole occupier of a place that previously housed the Jolie-Pitts and their gaggle of children, the utility estimates could be way out because one person requires less household power than many.

Also, if you live in a flat, make sure that you know exactly which gas and electricity meter belongs to you: you don’t want to be funding someone else’s tumble-dryer habit.

How to read your gas and electricity meters

Standard - you need the first five digits from the left. Ignore any red numbers.

Digital – you need the first five digits from the left. Ignore the final figure that begins with 0.1.

Dial – these are slightly more confusing. Again, they are read from left to right, and dials without numbers or hands should be disregarded. If the hand is in between two numbers, record the number it’s just passed (for example, if the hand is between four and five, you would write down four). If the next dial along is on nine, reduce the previous number by one (for example, if one dial looks like it’s dead on the seven, but the next dial reads nine, you would write the first number down as six).

Economy-seven [link to economy7 article] – these will include two different readings. The daytime reading will either be the top one, marked as ‘normal’, or the default display. The night-time reading will be the bottom one, marked ‘low’, or the reading accessed by pressing a button on the meter.

Pre-payment – these display a variety of information. Your meter reading should be shown after you press the button on your meter.

If you’re still having problems, your utility supplier should be able to give you specific instructions over the phone.

If your meter isn’t accessible (for example, if it’s awkward to reach, or you have sight problems), your gas and electricity provider should be able to arrange for someone to come out and read it for you on a regular basis.

Smart meters

You may be surprised to discover that most of the gas and electricity meters found in our homes are based on ideas from the nineteenth century. Obviously, a re-design was well overdue, and it’s appeared in the form of the smart meter. These are much more than a dusty box with a set of pretty meaningless figures.

A smart meter allows you to see the actual cost of the gas or electricity you use. It also provides information for each appliance: so you can see exactly how much your teenager’s MTV addiction is setting you back. The data can be accessed remotely, through a wireless connection, so you can set up a mobile or PC to monitor your energy usage. Smart meters are currently being trialled by most utility providers, and are expected to be in widespread use in the next few years.

Once you’ve begun to provide your utility supplier with regular meter readings, you can start to understand exactly how much energy you use.

We know energy suppliers provide us with our much-needed gas and electricity, but there’s a whole lot more they’re supposed to be doing too. After all, lights turning on and cookers heating up are just one small part of the service you pay for.

Meters: who reads what?

In a nutshell, both you and your energy supplier can read your meter, but the provider has a responsibility to send a representative to read it at least once every two years.

However, this means most of your bills are likely to be based on an estimated reading. To calculate the estimate, suppliers simply look at how much energy you’ve previously used at a similar time period. If you’ve recently switched suppliers, your new provider will ask a data collector for past readings, or they’ll just produce a standard estimate.

Hint: It’s a good idea to try reading your meter yourself, especially if you’ve recently moved house.

If you do decide to have a go at reading the meter, just call your energy supplier’s meter phone-line to deliver the results. The number should be clearly stated on your bill, but if you don’t fancy chatting to a representative, some energy provider websites let you enter the new meter reading online. Easy peasy!

Bills: what’s the deal?

Most energy consumers receive bills at quarterly intervals, no matter what form of payment. Energy suppliers are under no legal obligation, however, to provide you with a bill at specific intervals. Here’s the energy bill lowdown:

Even if you haven’t had an energy bill for ages, you will, of course, still be expected to pay for your energy consumption at some point. However, the Limitations Act 1980 stops suppliers from recovering gas and electricity charges if the energy was used over six years ago. For Scotland, this period is five years.

Consumers on prepayment meters usually receive a statement at least once a year detailing their energy consumption for that period, but it’s worth knowing that the statement might be based on an estimate.

If you have recently calculated and reported a new meter reading, your energy provider should send you a new bill based on it.

If you’ve set up an online account with your energy supplier, you should have online access to your statements and bills too.

Knocking on debt’s door?

If you get into repayment problems, don’t bury your head in the sand. Your first step is to call the energy supplier and explain your difficulties. Energy suppliers are obliged to treat you fairly if you’re having trouble meeting payments. One way they do this is to offer a repayment plan. For instance, if you haven’t received a bill for a certain amount of time (e.g. one year), you’ll be given that same time period to pay up.

HINT: If you were thinking of finding a cheaper energy deal by switching suppliers, bear in mind you will be required to pay any outstanding debt to your current supplier first. This includes the completion of a payment plan.

Renewable resources

Energy suppliers have an obligation to use renewable energy in their business - at least 6% of their energy resources should be renewable. Also, under the Renewables Obligation Order (introduced April 2002) energy suppliers are required to spend an annually increasing percentage of their energy sales on renewable energy.
To meet the obligation, energy suppliers must:

1. Acquire ‘Renewables Obligation Certificates’ – tradable certificates known as ROCS which are bagged for each megawatt hour of renewable energy generated, or

2. Pay a ‘buy-out’ price - according to the Department for Business Enterprise & Regulatory Reform, this price should be equivalent to £35.76/megawatt hour in 2008/09 and should increase each year. If a provider opts to pay the buy-out price, the payments are put into a fund which is later used by electricity suppliers who earned ROCs.

Alternatively, providers can earn ROCs and pay a buy-out price.

Got it? Good!

So now we have illuminated you on energy supplier obligations, and what additional things energy providers can do for you, why not see what you can do for yourself. Look into switching suppliers to get a great deal on your utilities.

EDF Energy's price cut has been criticised by a consumer watchdog for being "meagre" and totally ignoring its gas customers.

The company recently announced a price reduction from March 31 of up to 12.5%, with an average cut of 8.8%, affecting 2.3 million electricity customers.

However, Robert Hammond, of Consumer Focus, said: "Any energy prices drop is welcome but EDF's meagre 8.8% price cut is only good news to their electricity customers and only comes into effect at the end of the winter.

"We're also disappointed that their gas customers have been totally ignored.

"According to an Ofgem probe, three-quarters of the gross profits of the major suppliers and all of their net profits arose from the customers in their former monopoly electricity areas who had not switched.

"This cut appears to be more an attempt by EDF to address this criticism than a true reflection of the dramatic falls in both electricity and gas wholesale prices since July last year."

Energy and climate change minister Mike O'Brien said: "Any price cuts will be a relief for consumers. We've been pressing all the energy companies to pass on wholesale price cuts to their customers as far and as fast as they can."

Energy provider E.ON has announced it will cut energy prices from March 31.

It is the latest firm to announce cuts, saying it would cut prices by an average of 9%. However, gas charges will remain the same.

The move is as a result of lower wholesale energy prices with 4.1 million E.ON residential customers set to benefit from reduced bills.

Graham Bartlett, managing director of E.ON's retail business, said: "We are delighted to announce that we'll be reducing our electricity prices for millions of customers, while also having maintained one of the cheapest gas prices throughout the coldest winter in over a decade.

"We know our customers are facing difficult times and we are continuing to monitor the market to ensure the prices we offer our customers are as competitive as possible."

Scottish and Southern Energy recently announced electricity and gas price cuts while British Gas revealed it would cut the cost of its standard tariff by 10% for 75% of its customers from February 19.

Scottish Power and EDF Energy have also hinted that they are considering price cuts.

A smart meter is a cunning little gizmo that accurately monitors your energy usage. It uses GPRS technology to keep your supplier abreast of your usage in real time. In turn, you can check out how your gas and electricity consumption is going via the web. Isn’t technology wonderful?

So what’s so good about them?

There are two principal advantages to having a smart meter. One is that, because your billing centre will be regularly updated on your energy use, your bills will always be accurate and not estimates. The other is that by keeping close tabs on how much energy you’re using, it will be possible to reduce your consumption accordingly. You could even save as much as 15% on your bills, according to statutory body Consumer Focus.

How can I monitor usage?

After the data is sent to your supplier, it will be expressed in a digestible format on the net. You will be able to see your usage expressed in a variety of ways, such as kWh, cost and even in terms of your carbon footprint. As such, the customer can take better control of their energy usage, and it becomes a lot easier to reduce waste. To find out more about driving down your bills, read our guide on how to reduce your gas and electricity usage.

How much does this handy little device cost?

New supplier First Utility installs them as standard, and for free. Most suppliers don’t install these meters yet, but Ofgem want to have smart meters in every home by 2020. It only takes about an hour to do (or closer to two if you have dual fuel). Plus the smart meter is compatible with all energy companies since it can also be read by hand, so it doesn’t matter if you switch supplier.

Are there any disadvantages to installing a smart meter?

If you like being surprised by your bills, then you may be disappointed by the transparency afforded by a meter. However, if you’re a normal, sensible human being then the chances are that you’ll find it really useful.