Explanation of Annual Energy Statements

From December 2011 you will all get an annual statement from your energy suppliers containing information on ways in which to save money.

The new improved bills, inclusive of the annual statement, will explain precisely the amount of energy you have used over the year, its cost, and the amount you are likely to pay (provided they continue with the same tariff) over the next year.

In addition, suppliers will need to inform customers of any discounts and prompt them to swap to a cheaper energy tariff or payment method should there be one be available.

The energy regulator Ofgem introduced these new rules from 1 July 2011, following consumer group pressure and the urgent need for greater transparency in the energy market.

What does an Annual Energy Statement tell me?

An Annual Energy Statement will detail:

• The energy statement ought to clearly show following information:
• Tariff name: The full name of the present tariff is highlighted which makes comparison with other deals a lot easier.
• Energy usage: A figure which shows how much electricity and or gas a customer has used in the last 12 months. This enables customers to compile a picture of the amount they may have overspent on energy.
• Forecast for next year: Hereby the energy supplier tries to calculate what you are likely to spend on energy for the year ahead. This is calculated on the basis of the customer’s tariff and the amount they have spent over the last year.
• The supplier will need to provide you with information on:
• The exact terms of your existing contract, including relevant exit fees and the precise date your contract ends
• Complete details of premiums or discounts compared to with the supplier’s standard monthly direct debit tariff
• There needs to be a reminder to customers that they are able to switch supplier. Sources of independent advice on how to go about it should also be present.

Is there anything I should look out for on my Annual Energy Statement?

Things to watch out for that are not necessarily clarified on the statement:

• Kilowatt hours (kWh) are used to work out the amount of energy used. A kilowatt hour is 1,000 watt hours. Hence, you can work out the cost per month for a specific appliance from its wattage. Say all your light bulbs are 100 watts, and your household has had lights on for 200 hours altogether in the past month. By multiplying the 200 hours by the 100 watts and you will get 20,000 watt hours, or 20 kilowatt hours. Then multiply the 20 kilowatt hours by the cost per kilowatt hour. Should each kilowatt hour costs 24 pence, the lights are going to cost £4.80 for that month.
• Independent Gas Transporters (IGTs) are frequently used by constructors as opposed to Transco (National Grid) in new build properties because they charge less to fit pipes. Should that be the case in your house, you could have to pay £30-£40 more on top of any comparison quote for your energy.
• This is the case as the gas provider uses both Transco and the IGT to supply gas to your home and subsequently has to pay for both of them; this charge is passed on to you.
• There is going to be a meter point reference number (MPRN) on your new annual statement; one unique to your property. Should this be 10 digits long and start with 74 or 75 that means you are supplied by an independent gas transporter and are likely be charged extra.