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Energy Bills
As the cost of energy soars, energy bills are unwelcome guests in our home. If you don't understand them then it makes matters even worse as you could be paying much more then you should.
Your gas bill may look similar to the one below: It will have a number opposite Meter number but I have deleted this.
Since the "gas man" would like to sell you lots of gas, every energy company will offer you primary and secondary units with the primary units being more expensive than the secondary units. This is standard marketing practice where discount prices are given if we purchase larger quantities of any commodity. We see 4.339 p for Primary units and 2.825 p for Secondary units with the tariff change at 1202 kWh. Averaged out over the total consumption listed on the bill we see that an average unit cost for the present bill is 3.2 p. ( Note, on the electricity bill the break point is at 207 kWh - so for the first 207 kWh the cost is 17.76 p per unit and after this the cost drops to 9.08 p per unit )
To the right hand side there is a section labeled "Gas Calculation" . Here we have an age old problem. When we bought our bags of coal it sometimes contained lumps of slate, lumps of stone and many other unmentionables. We paid top prices for inferior quality coal. In today's world the "gas man" is trying to be fair. Firstly, the meter might not read the volume of gas correctly due to variations in gas density and so there is a correction factor 1.02264. Secondly, the gas may have different quantities of non-combusable gases and so the calorific value gives a measure of how good the gas is--- here 39.4 Mega Joules per cubic meter. After converting a volume of gas into energy units (Joules) it is normal practice to change this value to kiloWatt hours ( to be comparable with electricity consumption ) by a factor 3.6 --- there are 3.6 Mega Joules in 1 kWh.
Any credit is shown clearly as CR and this is preferable to signifying credit with a minus sign.
I am sure your supplier will explain any queries you have but feel free to contact me by e-mail if you require any other information.
Energy providers
Only a decade or so ago British Gas plc was a monopoly supplier of gas in the UK. Similarly, the Central Electricity Generating Board was responsible for electricity distribution with control of both the National Grid and the generating Power Stations supplying this Grid.
The gas bill was simple
And we never bought electricity from the "gas man". How things have changed in a period of a few years!!
A list of suppliers Atlantic Electric and Gas , British Gas , E-ON , EBI Co, EDF Energy, First Utility, Good Energy, London Energy, npower, OVO energy, Sainsbury's Energy, Scottish Hydro Electric, Scottish Power, SEEBOARD Energy, Southern Electric, SWalec, SWEB Energy, Telecom Plus, Union Energy, Utilita
Method of payment Pay on Receipt of Bill, Fixed monthly Direct Debit, PC (computer) or telephone banking, Prepayment meter, Regular payment scheme, Standing Order, Variable Direct Debit
Payment Plan Fixed price 2012 Dual Fuel, Market Tracker, Market Tracker Dual Fuel, Price Guarantee 2010 Dual Fuel, Price Promise 2010, Price Promise Dual Fuel 2010, Price Protection Dual Fuel, Standard, Standard Dual Fuel, Track and Save 2011 Dual Fuel, Web saver 1 - 4, Web saver 1-4 Dual Fuel, Zero Carbon.
It is with some consternation that members of a household are expected to have the acumen (financial wizardry) to choose the best "deal" - it involves the following steps - select a supplier - select a method of payment - and then select the most appropriate payment plan. And beware of anyone who offers to help you make a choice - they may well have a vested interest. You will need to ask any new supplier if there is an initial transfer cost and any severance cost if you wish to change supplier yet again after some period of time.
In general terms ---- the easier your new supplier can part you from your money ------ the lower will be your final costs, so (a) provide meter readings on-line, (b) take out direct debit, (c) plans such as "track and save dual fuel " will offer savings over standard payment plans. It is worth carrying out a comparison test using on-line software eg uSwitch or UKPower.co.uk This is an example of the final display
Note the different costs between E-ON and EDF
Since a "capped" tariff was taken out about two years ago the annual bill of £712.58 appears to be the lowest on offer. EDF Energy is slightly higher at £721.36 and the offers from the other energy companies were significantly higher. However, tariffs and payment plans are changing all the time so it pays to be vigilant.
Past Present Future
PAST
Having been a consumer for some considerable time a wider view of energy pricing may be helpful. The following graph shows costs around the 1970's
Gas was an expensive commodity prior to 1970 as it had to be manufactured from coal. It contained appreciable amounts of carbon monoxide and was lethal if there was any leakage in the home. It was called "town gas" and had to be contained in large metallic towers called gas holders; some of these can still be seen today. Security of the supply of energy was guaranteed largely by coal and during the 1950's and 1960's as there was a thriving coal industry.
North Sea gas, ( often called "natural gas" as it comes from "nature" - the earth ) a by product of oil discovered in the mid- 1960's, was just flared (burnt off) at the oil well heads . The "gas man" eventually realised that this waste product could be sold instead of town gas and by 1970 North Sea gas arrived in the UK. All appliances, industrial and household, had to be converted with a different "jet" being fitted to afford efficient combustion of the gas which had a different composition in comparison to town gas. The price of North sea gas was very low initially as it was a "freebee" - just and add-on to the oil. ( Note - in quite a number of oil-rich countries the gas extracted with the oil is STILL flared into the atmosphere as a waste product !!!) . Well, as we know, prices have risen ever since the 1970's but security of supply has been guaranteed in the following decades as we owned North Sea oil and gas.
RECENT PAST
Last year, 2008, we had a flavour of what is to come. North Sea oil and gas is becoming severely depleted and UK is now at the mercy of world supplies of oil and gas. The price of a barrel of oil hit the roof , over $140 per barrel , and certain people started to turn off gas taps so that gas became a scarce resource. Some European countries had no gas at all! Well, the energy suppliers (several from outside the UK) responded with great haste and put up prices as shown.
The household bills became frightening and OFGEM could only express their displeasure.
PRESENT
Now that everything has calmed down and the oil price is about $ 70 - 80 per barrel one would expect our energy providers to reduce their prices. Not a hope and OFGEM expresses more displeasure. Not even our TV terriors, eg Channel 4 Dispatches or BBC Watchdog can alter our plight -- cartels are answerable to no one and, whether we like it or not, the big six providers, listed above , operate very much as a cartel similar to OPEC.
Change of supplier
Stage 1
E-ON offer 1 Feb. 2010
They now use First unit rate and Next unit rate to distinguish between the two tariffs.
Electricity (excluding VAT) - 20.81 p/kWh below 900 kWh and 11.32 p/kWh above
Gas (excluding VAT) 6.643 p/kWh below 2680 kWh and 3.469 p/kWh above
Since I know my annual energy consumption to be 2555 kWh for electricity and 15000 kWh for gas it is easy to work out my energy costs Electricity - 900 x 20.81 + 1655 x 11.32 = £374 Gas 2680 x 6.643 + 10430 x 3.469 = £ 605 Total cost = £979.
This is an increase of roughly 25% of my previous costs and signals a change of supplier.
Stage 2
Unhappy with E-ON offer -- contacted U-switch 4th Feb. 2010 and after short conversation it was decided to switch to ScottishPower
Stage 3
Letter from ScottishPower 8th Feb. 2010 as below:-
The agreed direct debit is £59 per month, i.e. £708 per annum, which is considerably less than the E-ON tariffs.
A "change of mind" suggested at the end of the above letter was not necessary, so change initiated.
Stage 4
22nd Feb 2010 I phoned E_ON on their contact number 0845 302 3753 to inform them of my intentions to change energy provider (possibly this action is not needed).
25th Received e-mail from Scottish Power
Stage 5
25th February 2010
Letter from E-ON "Dear Customer We dont want to see you go....." Then several reasons for not making a change to Scottish Power
NO ACTION TAKEN
Stage 6
8th March 2010 e-mail from Scottish Power requiring meter readings. Readings returned by e-mail to Scottish Power. on 8th March 2010. Expect final bill from E-ON and start of contract with Scottish Power
( ((((((( Aside. Sunday Times Business section 14/03/2010 Uswitch sale. Although I am happy with the manner in which Uswitch initiated the transfer there are other on-line sites who would help you to do the same,
End of newspaper article ))))))))))))))
Stage 7
16th March 2010 I cancelled the Direct Debit to E-ON at my bank and made a telephone call to E-ON on 0800 056 7924 to inform them of the cancellation.
Stage 8
17th March 2010 Confirmation that ScottishPower is supplying Electricity and Gas to my home. Payment to be made by monthy direct debit about the middle of the month starting from April.
FUTURE
Only the bad news gets worse
It is very likely that fuel poverty will be the lot of many households in the UK and the security of our energy supplies will not be guaranteed. One can only hope that the warming waters of the Gulf Stream current does not desert our country otherwise surviving the cold of the winter months will be a major task for the whole nation.
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