Baffled by your energy bill? There are plenty of terms that can be hard to decipher, so we’ve put together this jargon-busting energy glossary to help you make sense of everything from MPRN to Economy 10.
Actual bill vs estimated bill
An actual bill comes from an actual reading of a meter from a smart meter, meter reader or customer reading. An estimated bill is when your provider doesn't have a meter reading so predicts your energy usage from previous bills based on your tariff.
The big six is the shorthand name for the UK's six largest power suppliers. They are:
- British Gas
- Scottish Power
Between them they had a 74% share of the UK electricity market and 68% of the gas market in Q4 2017, according to Ofgem.
This is the amount of time your energy bill covers – usually 3 months. You’ll be paying for the energy you used during this time.
When comparing deals, looking at the annual allowance can be more helpful in giving you the bigger picture of total costs.
MPRN and MPAN
These are reference numbers for your gas and electricity providers.
MPRN stands for Meter Point Reference Number – it’s also known as an ‘M number’ and relates to your gas supply point.
MPAN stands for Meter Point Administration Number – it’s also known as an ‘S number’ and relates to your electricity supply number.
You don’t need to worry about these too much, but you may need to know them when switching suppliers.
The network cost is how much it costs for your provider to supply your home with energy.
Ofgem is the Office of Gas and Electricity Markets. It regulates the energy market in the UK to protect consumers' interests.
In the context of energy, a collective is a tariff from a supplier that’s only available exclusively to a specific group of customers. This doesn’t mean an informal group, like friends or neighbours – it’s more organised than that. In the past, collectives have been arranged by councils, national newspapers and, of course, comparison sites for their customers. It's often referred to as collective energy switching.
All energy suppliers are required by Ofgem (the energy suppliers’ regulatory board) to make the information on their bills as clear as possible. A personal projection is an estimate of how much energy you’re likely to use and pay for over the next 12 months, based on your previous usage.
With a pre-payment meter you pay as you go for your energy by putting credit on your account before you use it, rather than receiving bills after power has been used. Typically money is added on to a key or smart card, which is then inserted into the meter. They can be topped up at a local Post Office, PayPoint, or corner shop that has the technology. Some can be topped up by mobile phone. Many households use them to help manage their energy use and to budget. However, tariffs for prepayment meters can be higher than others.
This isn’t about paying by debit or credit card. Every year your energy supplier will review your energy usage and adjust your payments. If you’re in credit, it means you’ve overpaid and are due some money back. If you’re in debit, it means you’ve underpaid and will need to pay a bit more.
This is when one energy company supplies you with both electricity and gas. You might be able to get a discount for going dual fuel and it makes it easier for managing payments, but it might not always be the cheapest option.
A QR code is a type of barcode for smartphones that looks like a square black and white grid on your energy bill. They were introduced by the government in 2014 to make it easier for people to access their bill information via their smartphone. You can also use it as a quick way to upload and compare your energy costs.
Renewable energy comes from a source that’s naturally replenished such as solar, wind power, tidal or wave power. It would exclude non-renewables such as coal, oil or natural gas of which there is a limited supply.
Single fuel is where you get your gas and electricity from different suppliers. Each arrangement would be for a single fuel.
Smart meters are slowly replacing traditional energy meters. They work by automatically sending meter readings to your energy supplier, with a display screen in your home telling you how much energy you’re using and how much it’s costing in real time.
You can pay to have a smart meter installed immediately or wait until your energy supplier upgrades you for free.
Economy 7 and 10
Economy 7 is a type of energy tariff that aims to help you save money by running a different electricity rate for 7 hours overnight. Economy 10 works in a similar way but has a set of ‘off-peak’ times – decided by the individual energy supplier – when fewer people use energy and so usage is cheaper.
Both tariffs use a different type of meter that has the two different energy rates. This can make it more expensive to switch, although you might save money on electricity in the long run.
Standing charge/No standing charge (NSC)
A standing charge is a usage fee that your energy provider charges for supplying energy to your home. Both electricity and gas have their own charge, even if you have a dual fuel account.
In 2016, Ofgem changed the rules so that energy suppliers don’t have to have a standing charge – although most still do.
If your tariff doesn’t have a standing charge, you’ll see ‘no standing charge (NSC)’ on your bill. However, this may mean you’re paying a higher unit rate for your energy.
An energy tariff is the type of contract you have with your energy supplier. Each supplier has their own range of tariffs, which detail how much you’re paying per kWh.
The two main types of tariff are:
- Fixed Rate/Price Tariff – where the amount you pay for each unit of energy and the daily standing charges are fixed to a set date in the future, but the size of your bill will depend on how much energy you use. These tariffs will help protect you from energy price rises.
- Variable Tariff – where the amount you pay can go up or down at any time. There are two types:
- Variable rate –what you pay can go up or down depending on market prices
- Capped rate – while the rate paid can vary, it won't go above a set rate or cap
Energy suppliers offer a variety of tariffs and name them differently to distinguish the different prices and conditions for each of them. It is important to know the name of your particular tariff.
An exclusive tariff is a special tariff that’s available only to a select group, or from an energy provider's particular partner – such as Compare the Market – and is not available elsewhere. It can have particular benefits and conditions. Compare the Market is often able to offer its customer exclusive deals. See what is currently available.
Estimated annual projection
The estimated annual projection is the energy company's best assessment of how much energy you’ll use in the coming year and its cost.
This is how your energy is measured before being converted into kilowatt hours (kWh).
Your unit rate is how much you’re paying for each unit of energy. It’s calculated in pence per kilowatt hour (p/kWh), with the unit rate multiplied by the number of kilowatt hours you’ve used to calculate your energy costs.
As with any goods and services, VAT applies to your energy. The government has currently fixed VAT on domestic gas and electricity at 5%, which applies to all energy suppliers in the UK.
If you’re on a fixed energy tariff and want to leave before the end of the contract term, you might be charged an exit fee. However, you shouldn’t have to pay an exit fee if you switch within 49 days of the end of the contract term.
Make sure you know how long you’re tied in to a fixed tariff before agreeing, and check how much any exit fees might be, as this could cost more than being on a variable tariff.
It’s worth noting too that if you do decide to switch suppliers, you have a cooling-off period of 14 days to change your mind without having to pay any exit fees.
Feed-in tariff scheme
This is a government scheme designed to promote more environmentally friendly renewable and low carbon electricity generation technologies. Some homeowners can be included in the scheme if they fit solar panels and create more power than they can use, and the excess power is fed back into the grid and the homeowner is paid for it.
This is power that’s generated in a way that could be considered more environmentally friendly, such as renewables – for example wind turbines, solar energy, biofuels or water turbines and so on.
kWh – kilowatt hour
This is how your energy usage is measured. Just like miles per hour in a car, kilowatt hours gauge how much energy you’ve used over your billing period. This is multiplied by your unit rate to generate your energy bill.
White meters are the Scottish version of Economy 7 in England. They have different prices for energy usage at different times of the day and night – known as peak and off-peak times.
You’ll have two meters with two readings showing your normal and off-peak energy usage. This means your bill will also show two different rates, which are added together for your total bill cost.
Each energy provider has different costs and rules around peak/off-peak timings, so be sure to compare before making a decision.
The wholesale cost is how much your supplier pays for the electricity and gas that they then supply to you.