Understand Your Electricity and Gas Bills

Please enable JavaScript in your web browser to get the best experience. BETA This site is currently in BETA. Help us improve by giving us your feedback . Costs included in your electricity and gas bills, includes standing charges and unit prices. There are different costs that are included in your electricity and gas bill. They are: The unit price rate is the rate charged per unit of electricity or gas you use. It is measured in kilowatt hours (kWh). The standing charge is a cost that is included in each electricity and gas bill. It is a cost set by your supplier. It is also included in the energy price cap that we review and set every three months. Read about the costs included in the standing charge and get average annual standing charge for electricity and gas. These are what you pay for the energy bought to supply your home or business. They make up about a third of your energy bill. Suppliers buy energy from electricity generators and gas producers on the wholesale market. Prices on the wholesale market can go up and down very quickly. They depend on what’s happening globally with fuels like gas, oil, coal and increasingly renewable fuels. Demand also affects price. Wholesale prices are generally lower when demand is low and fuel availability is high. They rise when the opposite is the case. Suppliers often buy energy in advance for their tariffs, some by as much as two to three years. They usually buy energy for fixed-term tariffs closer to when they launch them. These differences mean wholesale price changes don’t affect all tariffs in the same way at the same time. These are for the gas pipes and electricity cables that carry energy across the country into your home or business. Network companies charge your supplier an Ofgem-regulated price for their use of the energy network. This money goes towards maintaining, running and upgrading the networks. Network costs vary year to year. For example, to reflect usage or how we need to allocate costs on different parts of the network. Network costs include ‘balancing’ charges. Supply and demand is balanced second-by-second for electricity and daily for gas. These charges vary over time. Larger suppliers have to help pay for government energy policies. These costs could cover schemes to support energy efficiency improvements in homes and businesses, help vulnerable people and encourage take-up of renewable technology. These cover costs for things like: When suppliers set their prices they will try to cover their operating costs as well as make a profit. Operation costs cover things like customer service, billing and the general costs of running an energy business. Margins are a supplier’s overall earnings before deducting interest, tax and other costs.

Source: Original reporting via Office of Gas and Electricity Markets (Ofgem)