How is my energy bill calculated?

Energy bills can be confusing. Most people don’t understand charges for kilowatt hours (kWH) or calorific value (CV). Then there’s the difference between an estimated bill and an actual bill.

In a bid to clarify this thorny issue, energy provider npower has produced an online explanation for its customers – generating the handy infographic shown at the bottom of this post to clarify the matter. If I get my head around the idea then I might not be so scared to turn on the heating!!! At the moment we are favouring being wrapped up in blankets in an attempt to keep our fuel bill down.

And I am quite partial to wearing my heat holders leggings and vest to stay nice and cosy!

Before you take a look at it, here is a run-down of what you need to know about your energy bill and how it is calculated. It might sound a little yawn worthy but you will be glad you have learnt your way around your bill.

Basics on your bill

The bill that you receive for your gas or electricity will cover a variety of payments and doesn’t just comprise the amount of fuel that you use on a monthly basis. For example, your electricity bill will have a whole range of charges that make up the bill total. The charges imposed by your supplier will include VAT, at 5%, the amount your supplier contributes to government energy initiatives 13%, and operating costs of 15%.

You will also be charged for the cost of the energy, this comes in at 35%, and profit of 5% is added to the bill. Finally, the amount that you pay will also include the price of getting your power to your home, which is priced at 27%. The supply and consumption of energy is an essential and expensive business.

Meter readings

The meter readings that appear on your bill will show whether you took the reading and submitted it to your supplier, the letter ‘C’ shows this is for customer. The ‘E’ stands for estimated and the ‘A’ refers to the actual bill reading.

Clarification of bills mean that your supplier may suggest a cheaper tariff, that might suit your needs better. You should also see, for both electricity and gas bills, a figure denoting the amount of energy used and its price per unit. Those on fixed tariff plans will also have their plans and costs highlighted on the bill.

Changes in fuel bills

As a result of public dissatisfaction with energy bills the UK Government has suggested changes which will help consumers monitor their household fuel consumption. Some energy providers have already made use of technological innovations and introduced apps that help you keep an eye on your fuel usage and cut down on waste – the information provided on a smart meter will show exactly what you are spending so when you receive your bill so you’ll have a clearer idea what you’re paying for.

When in doubt contact your supplier!

If you are at all concerned about your bill, then get in touch with your supplier. There are many online resources that can help shed light on this subject too and you can always phone the customer services centre for a direct conversation.

It’s far wiser to understand what you are paying for than become angry simply because you can’t get your head around your bill. Energy companies such as npower have simplified their billing processes as much as possible but they’re always on hand to talk it through with you if you need additional clarification.

npower’s infographic

To help customers understand how they’ve made things easier, npower produced this great infographic which is available to view on their blog:

Source: npower blog

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