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An unpleasant surprise from my Energy Supplier!

About a week ago I received my monthly energy statement from one of the big six energy suppliers. Since it was about a year since I swapped over to them, I thought it best to take a look and see what I was paying and if there were any cheaper options out there for me.

Energy bill direct debit

Imagine my surprise when they announced they were upping my direct debit from £70 to £210 each month!

About a year ago – I wrote a blog about the importance of understanding the energy bill – and taking a look at this particular energy bill really highlighted the point.

To set the seen I live in a maisonette flat – solid brick. Almost impossible to insulate unfortunately, unless I pull ceilings down which kind of makes it uneconomical to do since I am not planning on being there for too long. Until recently my flat mate also worked from home and liked to use every appliance under the sun it seemed!

My energy bill

Anyway my energy usage for the previous year was approximately 4000kWh of electricity and 10,000 kWh of gas per year.

Now based on average gas price of 3.75p / kWh and an electricity price of roughly 15p / kWh, this meant my energy bill was just over £1000 per year – you can see how I calculated this below:

Electricity       4000 kWh x 15p / kWh                   = £600

Gas                  10,000 kWh x 0.0375p / kWh        = £375

Then include £50 – £100 standing charge = total £1,050 per year.

2014 - 15 Energy Usage projectionOn the bill they sent through, not only have they let me know that I am currently in credit (so they owe me money for the year), they have also projected my next years energy usage – it is slightly higher than what I currently use, but broadly in line.

Now – based on their projections, I was expecting my direct debit payments to increase marginally since £1300 / 12 months is roughly £110 per month, obviously based on my calculations I was expecting to pay far less than this, but certainly not more!

You will appreciate my surprise then, when the bill said that the energy supplier is to increase my monthly payment to £200 per month effective from the 1st April 2014.

£200 per month!! Seriously – are you kidding me! £200 x 12 months is over £2400 per year. I use less than half of that.

Check you are getting the best deal on your Energy!

Now – I am fortunate enough (and geeky enough) to understand all the numbers in my energy bill, but what about the majority of households who just pay their bill each month without really understanding what they are paying for?

It highlighted again the importance of using a price comparison site (I have actually since swapped to OVO), to find out the best deal. You can click here to find out how to use uSwitch, and what details you are going to need at hand to swap.

Take home message – Check your energy bill!

All I want people to take from this is to do a sense check on the energy bill when it comes through. Of course the energy companies want to take as much money from you as they can – but don’t let them! Provided you have been with them for a year you can ring them and get the annual energy usage – ask for the number of kWh used in this time.

Take the gas number and multiply it by 0.0375 and the electricity number and multiply it by 0.15. Add the numbers together and divide by 12 months – this should give a very approximate value of what you should be paying on a monthly basis – if you are paying more tell them to reduce your direct debit.

They cite that it is difficult to accurately predict monthly direct debit payments, since almost every one uses far more energy in the winter that in the summer – so you pay more in the summer that you need, but less in the winter, but using the simple method above gives you a good estimate.

We have to stand up to the energy companies. Unfortunately we rely on gas and electricity to live our lives, but you can at least make sure they aren’t taking the mickey!