Reviewing Your Energy Costs

by Ken Frere
Member of NfCG’s Executive Committee.

In the last three years a great deal of money has been spent to make it possible for domestic users to have a choice of suppliers for electricity and gas. The market for gas has already been opened up completely to competition, and the domestic electricity market is well on the way to being opened up throughout Great Britain. So far, fewer than half of us have changed our gas suppliers. Do we have a sentimental attachment to Mr. Therm, or his son Sid? British Gas is promising a price cut in March, but will that bring its prices below those of its competitors? Will the deregulation of the domestic electricity market persuade us to review our energy costs?

Costs compared

We analysed the comparative cost of domestic gas supplies in 1998, and we have now done the same for electricity. Prices are different in each of the 14 regional distribution areas (one for each of the original Public Electricity Suppliers). We have calculated total costs for each area, for a range of levels of use, for single-and two-rate meters, and for payment by cash or cheque quarterly and by direct debit monthly. There is not enough room to publish all this material in Consumer News, but you can look it up on the NfCG web site at http://www.ncf.info. Local Consumer Groups are also publishing information for the benefit of their areas.

NfCG does not recommend any particular supplier to suit your needs. You must make your own choice, and you do not have to change your supplier. However, changing suppliers is easy. You keep the same meters, and the pipes and wires coming into your home stay the same as now. All that changes is the company which sends you your bills, and how much you pay for your electricity and gas.

Reducing your costs

The main reason for changing will probably be to cut your costs. Some of the companies now competing in the domestic electricity market are cheaper for households where the level of use is low. Competition is strongest for average-level customers willing to pay by direct debit. A few companies are relatively cheaper for customers with high levels of use. The telling thing is that in almost all cases your original supplier is more expensive than new entrants to the market.

At the moment the difference in total costs for average-level single-meter customers is (depending upon area) between £24 and £45, or between £31 and £48 for payment by direct debit. When the market settles down all the current prices may change. If you change your supplier you can change again, as often as you like, provided you give notice. The period of notice is usually a month, but it may be a year, so check the paperwork.

You may get a discount if you take both gas and electricity from the same supplier. The discount is typically £10.40 or £14.50 per annum (inclusive of VAT). This level of discount does not mean that your combined bill will always be less than the total bill from two cheaper suppliers.

Making the change

If you decide to change, get up-to-date statements of prices, periods of notice and other conditions from the possible new suppliers. You will be asked to sign a legally binding contract. These contracts have been scrutinised by the industry regulators, and are unlikely to be unfair to you. Perhaps the most important variable, apart from price, is the length of notice required for you to end the contract. Our view is that 28 days is fair to both sides,

Once you have signed the contract your new supplier will arrange the changeover with your existing supplier, including meter reading. If you have been paying by Standing Order, cancel the instruction to your bank before you receive the final bill from your existing supplier. If you pay by direct debit, check to ensure that the existing supplier does not continue to take money from your account after you have paid the final bill.

Although the electricity and gas will be the same whichever supplier you choose, the service they give may not be the same. If at any time you are dissatisfied with the service given by your supplier do not hesitate to say so. Tell the company first. If that doesn’t work, contact your local Electricity or Gas Consumer Committee, or Trading Standards Department.

Arrange the Change

Your new supplier will need to know: 

• Your Electricity Supply Reference Number. Look on your bill for a box containing a large letter 5, followed by two lines of numbers. The top line of numbers is the Reference Number you need to quote.
• Your Gas Meter Point Reference Number. Look in the small print at the bottom of your British Gas bill

OR

• Your Customer Reference Number from your bill for gas or electricity.

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