What is energy? The ultimate guide to utility supplier comparisons

by / Tuesday, 08 July 2014 / Published in Utility Comparison
Energy review:
James Ashby

Reviewed by:
Rating:
4
On July 8, 2014
Last modified:January 15, 2016

Summary:

The 'What is energy' review provides a detailed review surrounding the different qualities offered by a number of gas and electricity providers

Utility companies help deliver energy to houses across the UK, but how helpful are they in reducing your monthly bills? This website has researched the options you have to save you hundreds of pounds every month on your energy bills. We also identify additional key factors that contribute to the best service to help you find the best overall provider.

We will answer all your questions, from the fundamental questions like, what is energy and what is electricity, to the real value questions of identifying the ways you can save money from a comparison of energy prices.

Act now and save hundreds of pounds every year! What can you do with an extra £200 a year for instance?

Switching utility companies is a piece of cake, whether you are currently with the likes of N Power or Spark Energy for example, you can easily see how much you could save from our recommended utility company, Utility Warehouse.

So who can you choose to supply utility services to your home?

Believe it or not, there are over 40 energy providers in the UK. Too many options you may think? The majority of customer in the UK, however, choose the ‘Big 6’. The ‘big 6’ consists of British Gas, EDF, E.on, Npower, SSE and Scottish Power. These providers have an advertising budget that allows them to dominate the market, however, there are many other factors that determine a quality utility service and this isn’t down to the market share.

Other notable utility companies include Utility Warehouse, Spark Energy and Good Energy. In fact, there have been a number of studies from reliable resources, rating the smaller energy companies such as Utility Warehouse and Good energy higher than the big 6. The difference is the focus and commitment they can add to a smaller customer base which significantly drives value beyond that of the big 6, as seen from customer satisfaction surveys. Google and see for yourself.

What should you be comparing when choosing your utility provider?

The key considerations you should be reviewing, which I’m sure you agree are:

• Value for money

• Customer service

• Ability to understand your bills

• Low complaint rates

• Help in saving energy

Let’s look at these individually to identify what you value the most.

Value for money – The cheapest deal

Finding a really cheap deal is great, however, be aware that utility companies often raise their prices with very little notice. We realise that customers often have problems and complaints about such price rises and having done all the research into this for you, we will not recommend suppliers with bad practices. You may think you start on a good rate, however, prices have been known to significantly rise without notification.

It’s hard to say at any time which company is offering the cheapest rate without researching your own quote. From our research, we trust Utility Warehouse and recommended them to many of our close friends and relatives. You can see how much you can save hereat Utility Warehouse.

Quality customer service

In a perfect world, customer service phone lines would be free to call, they would be UK-based and they would answer your call immediately, rather than forcing terrible waiting music upon you. Whether you want to query a bill, ask for help or provide a meter reading, customer service should be a fundamental factor in choosing your utility bill.

There are only a few utility companies that we would recommend for their customer service, but with these select few you can take comfort in the knowledge that when you have an urgent issue, you can resolve it within a matter of minutes by speaking to your UK advisor.

A number of utility reviews have identified that once again, some of the smaller and less well known utility companies are coming up trumps by offering a high quality customer service. Key studies have found that, Ecotricity, Ebico and Utility Warehouse come top for their customer service in reviews. We recommend the high valued services of Utility Warehouse, as we know that Utility Warehouse value customer satisfaction over anything else and their UK based call centre can certainly help in understanding your issues.

Complexity of bills – Understand what you are paying for

When you receive your bills, naturally you want them in the simplest and clearest form enabling you to understand it immediately. Yet, too many energy companies present you with bills that appear impossible to decipher. Not only this, but then they often further confuse you by delivering separate statements for both gas and electricity as well as offering multiple rates that, of course, baffle us all.

A good bill is one that is always accurate, keeps the payment process simple and helps you understand what you are paying for. A number of utility companies will do this for you allowing you to know exactly what you are being charged for.

There are several utility companies that keep the payment process simple by offering a simple and easy to understand bill. First Utility and Utility Warehouse help reduce the time needed to review your bills. Utility Warehouse for instance, provide, not only for gas and electricity, but also home phone, broadband and mobile phone. However, they combine all these 5 bills together into one single bill, allowing you to know all your outgoings with ease. How helpful is that!

Low complaint rates – Issue avoidance

Excellent customer service most certainly helps reduce complaint rates within any business. This combined with the promise of maintaining a high quality service, no hidden fees and no extra charges builds customer confidence and loyalty. Not knowing who to trust is completely understandable, however, we are here to reassure you that moving is often greatly advantageous.

Changing utility provider can not only be financially beneficial, but it can also save you time and energy. When you’re spending hours on the phone to customer service trying to resolve issues with your current provider, you could just as easily switch to another with better quality customer service and reap the benefits in the long run.

Smaller utility companies are realising the benefits of offering a really high quality level of service, as customer loyalty is one of the key building blocks to a sustainable business. While some of the larger utility companies have thousands of calls and complaints per day, up and coming utility companies can often offer a more tailored approach focussed upon quality of service, rather than reducing customer call time.

Helping the environment

Not all utility companies are focussed on saving energy, however, there are a number of utility companies that do have resources available to discuss ways in which you can save energy. Good Energy, source their energy from local and natural resources to help save energy from an environmental perspective. Utility Warehouse, on the other hand have a dedicated energy efficiency line to help identify ways in which you can save energy.

There are a number of energy saving techniques you can implement. These techniques include;

• Turning down the heating temperature

• Buying energy efficient appliances

• Switching off the lights where possible

• Turning down the water temperature on the boiler

• Insulating your home.

What is energy?

Before we go any further, let’s go right back to the basics and have a look at what it is exactly that utility companies are offering, so you can finally understand where all your hard earned cash is going.

Utility companies provide houses with their gas, electricity and in some instances mobile, home phone and broadband. As gas and electricity are a key component to the majority of utility companies, you may also call these energy companies or energy providers.

Gas and electricity are the main forms of energy supplies that our utility companies provide us with, and in this day and age, are essential to keeping your daily life functioning smoothly.

What is electricity?

Electricity is a form of energy that is made up of charged particles. These charged particles are part of an electric current that can be supplied to buildings delivering power to your lighting, electronics and heating.

These days we are surrounded by electrical items and electricity keeps your household essentials and gadgets running. From lighting up your house to turning on your TV, not having electricity will most certainly be a shock to the system!

What is gas?

Natural gas (also known as a fossil fuel) is sourced deep underground. Wells drill down to bring the gas up to the surface through a connection of pipes. It’s through a network of pipes across the UK that gas can be delivered directly to our homes.

Gas is mainly used in homes to deliver heat around your house. This is mainly in the form heating water for your radiators, and bathroom and also a more obvious source, your gas cooker/hob.

Electricity Calculator: How much are you paying?

When first choosing your energy tariff, you will be faced with several options. Let’s have a look at the different ways you can pay and how your bill is calculated by using our electricity calculator model.

Variable Rate – Direct Debit

A variable tariff does not guarantee you the same energy unit rate every month (or quarter). A variable rate is open to change, so it can either decrease or increase at any given point. Using this rate, you will pay for the amount of electricity you use, based on your meter readings.

Calculating your electricity bill for a variable bill is slightly more complicated, so let’s talk you through the electricity calculator sums.

You will need the following information to work out how much you have been charged for a particular period:

• How much energy you have used. This is measured in Kilowatt per hour (kWh)

• Unit price (the rate being charged)

• Standing charges

• VAT

• Discounts

The overall cost for your utility bill is generally made up by calculating the energy usage (unit price multiplied by how much energy you have used), then adding the standing charge cost (standing charge multiplied by the number of days in the charging period), minus any discounts you have and finally by adding VAT on the final price.

Example of how you would calculate your bills

Let’s look at an example using made up rates for calculation purposes only.

• Energy used – 400kWh

• Unit price – 12.00p

• Standing charges – 14 pence per day over a 30 day period

• VAT – charged at 5% in this example

• Discount – £5 discount

First of all we calculate the energy cost. This is calculated by multiplying the energy used by the unit price. 400 multiplied by 0.12 gives us our basic energy charge of £48.

Secondly we calculate any standing charges added by your utility company. This is 0.14 (14p) multiplied by the number of days in the month- let’s say 30 for the purpose of this example. This gives us a standing charge of £4.2.

We add these standard charges together to give £52.2. Minus our discount of £5 makes the overall charge before VAT £47.2.

To work out the VAT, you would multiply 47.2 by 1.05 (5%) to work out your overall price of £49.56.

Many utility companies include extra charges to make the calculation of your utility bills even more complicated. These additional charges include multiple unit rates for different levels of energy quantities used. As mentioned earlier our recommended utility company, Utility Warehouse, keeps the bill process simple and offers just one single monthly bill.

Fixed rate – Monthly or quarterly direct debit

A fixed tariff, sets the rate you will be paying over a year period, or sometimes longer. A fixed tariff guarantees you a constant rate over the length of your contract, every period (usually monthly or quarterly).

When you switch or start your first contract with a utility provider, your initial quote will be based upon a number of factors including, the house type and the number of people living in the house, to the previous year’s energy usage (where applicable).
When you are through your first year’s contract with your utility company, the next years fixed price rate will more than likely change.

Calculating what you will be paying on a fixed rate over one year is slightly easier than calculating a variable rate over one year. Using the same calculation as the example above, you can use your annual energy consumption figures and the standing charges over 365 days to work out the overall yearly total.

You may want to consider this option if you want steady payments that guarantee the same rate every month. Please note that some utility companies will increase this payment after the first year.

Alternative Methods of paying

Cheque or cash payments

Cheque or cash payments can be made to some utility companies when the monthly or quarterly bill is due. Payments can be sent in via the post, post office or the bank.

Some utility companies will charge late fees, where payments have not been received by the designated payment date. This can significantly increase the price of your annual bill. We recommend using direct debit where possible as utility companies prefer this payment method and will often offer a lower rate because of this.

Some discounts can be offered when paying by cash or cheque payments where the payment is on time. This however, will more than likely still be more than the cost of direct debit payments.

Credit or debit card payments

With credit / debit card payments, you are required to make the payment within a set number of days of when the bill is issued. For this option, you can pay online via your account page or over the phone to an advisor. Online availability however, is dependent on the utility providers’ availability to offer this payment method.

Prepay meters (Pay as you go)

This method of payment requires a regular visit to the local shop to top up the payment card/key. You will also need to change your energy meter within your household to accept this payment method. Your machine will show you how much credit you have left and when this runs low, you will need to add some credit.

One major issue with the prepaid option is, when the credit runs low, your energy supply will run out. This option is also likely to be more expensive.

If you have this option, you can easily switch to another provider if you wish to continue paying via the prepaid method or you can change payment method by switching to another provider.

Utility comparison in a nutshell

I hope you have enjoyed reading about our views and recommendations. Saving money on your energy can be easy and it would be a shame to pay more for your gas and electricity than you need too. Energy is an extra cost to your monthly bills and you can spend money on the more precious things in life.

Switching energy providers is such an easy process. Please read our article… which identifies the process of switching. Our recommended utility company, Utility Warehouse will do all the hard work for you so the process is as simple as getting a quote and signing up.

You can get your quote by fast tracking to the Utility Warehouse website.

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