Energy bills are written for the supplier's billing system rather than for the person paying them. This is what every line actually means, which numbers are worth your attention and the handful of checks that catch a bill charging you for energy you did not use.
Most people check one number on an energy bill: the amount due. That is understandable and it is also the one number that tells you least, because it is the output of about six other numbers you did not look at.
The useful ones are further down. They are what tell you whether the reading was real or guessed, whether your direct debit is set anywhere near your actual use and whether the bill in front of you is correct at all.
None of it is complicated once somebody points at the right lines.
The short version
- The standing charge is a daily fee you pay whether you use energy or not
- The unit rate is what you pay per kWh on top of that
- An E next to a reading means estimated, which means the bill is a guess
- Gas meters measure volume; the conversion to kWh is on the bill and worth checking
- VAT on domestic energy is charged at five per cent, not twenty
- If a supplier is at fault, it generally cannot bill you for energy used more than twelve months ago
What a bill is actually made of
Whatever the layout, every domestic energy bill contains the same five things.
- Who you are and which meters you have, identified by a long reference number per fuel
- The period the bill covers and the meter readings at each end of it
- How much energy that works out as, in kWh
- What that energy costs, split into a standing charge and a unit rate
- What you have already paid and the balance either way
Suppliers present these in wildly different orders, which is most of why bills feel confusing. The content is the same.
Every line, explained
| Line | What it means | Worth checking? |
|---|---|---|
| MPAN, or supply number | The unique reference for your electricity meter point | Only when switching or moving in |
| MPRN | The same thing for your gas meter point | Only when switching or moving in |
| Meter reading, with A, C or E | Actual, customer supplied, or estimated | Yes, every time |
| Units used | The difference between the two readings | Yes, if the bill looks high |
| kWh | Energy after conversion, which is what you are charged for | Yes, on gas |
| Standing charge | A fixed daily fee, shown as pence per day | Yes, when comparing tariffs |
| Unit rate | Price per kWh of energy actually used | Yes, when comparing tariffs |
| VAT | Charged at five per cent on domestic energy | Yes, if it looks like twenty |
| Balance brought forward | What you owed or were owed at the last bill | Yes, if it is unfamiliar |
| Payments received | Your direct debits during the period | Yes |
| Projected annual statement | What the supplier thinks you will use in a year | Yes, once a year |
| Tariff end date | When your fixed rate stops and you roll onto a variable one | Yes, put it in a calendar |
The tariff end date is the single most valuable line on the bill and the one people most reliably miss. Rolling silently off a fixed rate onto a variable one is one of the more expensive things that can happen to a household without anybody doing anything.
The standing charge and the unit rate
These two do different jobs and it is worth keeping them apart in your head.
The standing charge is a fixed daily fee. You pay it for every day you are connected, whether you use a single unit of energy or none at all. It covers the cost of the network that brings energy to the door, keeping your meter and a share of various industry costs. It varies by region, because network costs do.
The unit rate is the price of the energy itself, per kWh. This is the part you can influence by using less.
The practical consequence is that comparison is harder than it looks. Two tariffs quoting the same unit rate can differ substantially over a year on the daily fee alone; a headline unit rate with a high standing charge behind it can easily be the more expensive of the two for a low user. Always compare both numbers, or compare the projected annual cost, which folds them together.
How a gas reading becomes kWh
This is the part of a gas bill that looks like arithmetic nobody can check. It is checkable and the numbers are printed on the bill.
A gas meter measures volume, not energy. Older meters measure in hundreds of cubic feet, newer ones in cubic metres. The bill converts that volume into kWh and charges you per kWh.
The conversion runs like this:
- Take the units used between the two readings
- If the meter is imperial, convert to cubic metres by multiplying by 2.83
- Multiply by the volume correction factor, which is usually 1.02264
- Multiply by the calorific value, a figure printed on the bill that varies slightly by region and period
- Divide by 3.6 to get kWh
You do not need to do this every month. It is worth doing once, on a bill that looks wrong, because it either confirms the bill or identifies exactly where it went astray. If a supplier has been given an imperial reading and treated it as metric, this calculation is where that shows up and the difference is large.
Five checks that catch a wrong bill
Work down these in order. Most problems are caught by the first two.
- Is the reading actual or estimated? Look for the A, C or E. An E means submit a real reading before doing anything else.
- Does the opening reading match the closing reading on the last bill? A gap between them means a bill has been reissued, an estimate has been corrected, or something has gone wrong.
- Is the meter serial number on the bill the same as the one on your meter? Mixed up meters between neighbouring properties are rarer than they used to be, but they still happen and they can run for years.
- Is VAT at five per cent? Domestic energy is charged at the reduced rate. Twenty per cent on a household bill is an error worth querying.
- Does the projected annual figure look like your actual use? If your direct debit is built on a projection that is far too high, you are lending the supplier money; far too low and you are building a debt that arrives all at once.
Why keeping the bills matters
A single energy bill tells you what you owe. A run of them tells you something far more useful: what your home costs to run and whether that is changing.
That matters in three situations. When you are deciding whether insulation or a new boiler is worth paying for, the honest answer comes from your own consumption history rather than a manufacturer's estimate. When you are querying a bill, the previous ones are your evidence. And when you sell, a buyer asking what the house costs to run is asking a question you can either answer with numbers or with a shrug.
Keeping them is the same argument as the digital property logbook: the record is nearly worthless on the day you file it and quite valuable three years later.
Let the bills file themselves
homehogs reads a bill you photograph or forward, pulls out the readings, rates and dates and builds the running cost of your home as you go.
Join the waiting list
