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Even accountants can’t calculate the cost of energy tariffs

Maths formula on chalkboard

Q: Would you be able to work out what your energy bill would be if you were to switch tariff without using a switching site? A: No. We put 36 people to the test and only one could work it out.

There are now around 400 energy tariffs to choose from. Do we really need so many different options for what is, at the end, only gas and electricity?

Tiers, standing charge, discounts, exit fees, capped tariffs, kWh… why are tariffs so complex?

Can you make sense of your energy tariff?

To illustrate the problem of just how complicated tariffs are, Which? asked 36 members of the public – including a solicitor, an engineer and an accountant – to work out how much they’d pay per year if they were to switch to a certain tariff.

We chose the ‘standard tariff’ from the three biggest suppliers of dual fuel domestic customers in Great Britain: 12 people were each given British Gas, SSE and Eon.

Participants were allowed to use a spreadsheet and a calculator but were banned from resorting to a switching comparison site. This is because most people don’t use them to switch, and companies ought to provide clear information on their deals so you could check prices if you wanted to.

Only one of 36 – a director in the retail sector – managed to work out how much he’d pay, unaided. The others all made mistakes or needed help when calculating the costs or could not find the tariff information on the suppliers’ websites. Even a solicitor, an engineer and an accountant couldn’t work it out.

Simpler tariffs are out there

Our maths expert said that A-level maths students would struggle and that the vast majority of the population – perhaps 95% – would not be able to obtain the correct cost for their usage.

Some people also tried simpler tariffs from Ebico and the Co-operative. The success rate was higher: 10 out of 28. So there are alternatives already on the market showing that tariffs don’t need to be so complex.

Have you ever tried to find out the rates of the tariff you’re on? Would you like to see a simpler tariff structure when you could compare tariffs at a glance?

Comments
Profile photo of wavechange
Member

I decided to have a look at E.ON’s prices without logging into my account. The list of prices and discounts does not mention EnergyOnline (which is what I’m using) though searching the site does give details. Not a good start.

We do need simple, clear pricing that makes it easy for all users to compare prices. Until that happens, the only real option for most people is to use the price comparison websites.

Profile photo of richard
Member

Well if EDF is anything to go by – even the rip off merchants can’t calculate it properly either.

Just received my new tariff – the increase doubled my tariff – though I have no increase in consumption.

Got in touch this morning and they agreed they had made a mistake and will recalculate. But how many customers won’t query the increase and suffer????.

Profile photo of catronagrant33@aol.com
Member

If THEY are making mistakes in calculating the new tariffs, what chance do most people in the country have ? My partner pays the bills and he queries nothing, I guess I will check now that it has been mentioned ,they always seem to make mistakes,probably that’s what they get paid for, if no one looks or questions it they WOULD NOT exactly offer a refund would they?

Profile photo of richard
Member

I learned my lesson many years ago when Midland Bank started billing me a few pounds a month for “Sundries” – on the third occasion I queried it and they couldn’t offer an explanation – though gave me a refund – So I changed banks.

Now my on-line account allows me to check daily if required – Have found one small illegal transaction in 20 years which was refunded instantly. It was a trial withdrawal of £3.42 that if I hadn’t kept a close watch on all transactions – the perpetrators would have cleaned out my account on their next transactions.

Profile photo of philthunder
Member

With energy companys why do we have gas supplied by the cubic metre converted to calorific value, volume correction applied then converted to kWh, its no wonder you need A level maths to be able to get any idea what you use. Would it really make that much difference to charge us by the cubic metre as surely calorific value should be the same all over the country.
After you get your usage you then need to know what the Energy company will charge you for the first X number of kWh used then the remainder at whatever rate is applied.
Another con is when they put up prices, they charge you midway between bills,without taking a reading before the price goes up.
Best company I have been with is EBCO but they got expensive, worst EON, six years to correct my billing! Im trying Co-Op now so far so good.

Profile photo of richard
Member

Calorific value does vary both by time and area. That is CV in the summer can be different from that in the winter – and depending on the wholesale supplier at the time.

Member
A Vidkers says:
28 September 2011

Why do we need so many suppliers? The electricity comes down the same power cables to us all,from the same power stations, gas down the same pipes to us all, from a common storage facility.We then have the false competition between supply companies,is this competition necessary?whatever happened to a proper managed national management.It is so critical to business and domestic to be left alone.

Profile photo of richard
Member

Blame Maggie Thatcher – she sold off the Gas and Electricity. Coincidently that was the time prices started to rise.

Profile photo of philthunder
Member

Richard
If calorific value does change why dont Energy companies change the value on your bill. I was with EON and calorific value never changed on my bills.

Profile photo of richard
Member

As I said – it depends on the wholesaler – If EON does not change their wholesaler then CV may not ever change until and unless the wholesaler’s particular source of supply changes. The source could be the same for many years. Plus the CV can be the the same from two different sources of course. But CV is not necessarily the same for all sources..

Profile photo of auz@mikelefort.plus.com
Member

I’m with eon and I sent them a message after they had increased their prices ago accusing them doing this purely to give bigger dividends to share holders and also for the bonuses for their top staff. They were not even polite enough to reply to my message

Member
Glyn Scantle ury says:
27 May 2016

I just spent 30 minutes on google and on Which to find out the price of one kwh of electricity – result – no answer. This is the problem with the internet these days, you only get adverts. Its going backwards.

Profile photo of malcolm r
Member

If you put your details into Which?Switch to check your estimated annual cost, and go to any of the energy companies you will find their tariff – unit prices plus any standing charge. You should also find the tariff by going to an energy company’s website; you’ll need to put in your postcode and then look for “tariffs” (not TCR).