Gas and electricity jargon explained

Energy-related terms translated, to make bills less of a pain...
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Gas and electricity jargon explained

Energy-related jargon, busted

When it comes to paying for energy, there’s so much jargon bandied around that bills often end up being a pain to understand. This can make the prospect of switching to another energy provider both confusing and daunting.

We’ve assembled some of the most notoriously confusing energy-related terms and given easy explanations so you don’t get caught out when your statement arrives, or when it’s time to switch. Read on to find out exactly what your energy provider is talking about…

Capped plan - Similar to a fixed-rate plan, a capped plan is a tariff that means you never pay more than you’ve agreed for each unit of energy for a fixed period of time. However, unlike a fixed-rate plan, decreases to gas and electricity prices can lower the rate you pay, saving you money.

Direct Debit – Automatic payments taken directly from your bank account. Payments are made at regular intervals, allowing you to financially plan around the date your payment is due. Suppliers offer discounts to customers that pay via Direct Debit as it saves admin fees, making this the cheapest way to pay for energy.

Dual fuel – An energy plan that provides both your gas and electricity together. Having a single plan for both can save you money, but it’s always worth keeping an eye on other tariffs to see how much you can potentially save.

Economy 7 – A tariff that gives you energy at a lower price at off-peak times. As the name suggests, this is for 7 hours a day (usually overnight).

Estimated bill – If you haven’t submitted a meter reading to your supplier, they will issue you with an energy bill based on average usage or previous bills. Give regular meter readings online or by phone to your energy provider to receive more accurate billing.

Alternatively, getting a smart meter is a great way to save - read more about it here: 5 ways to save a bundle on your energy bill.

Kilowatt hour (kWh) – The unit that gas and electricity usage is measured in on your energy bills. You’ll see this a lot. Electrical appliances are rated in watts and kilowatts, making it easy to choose appliances based on how much they cost to run. For example, a kilowatt is enough to run a full dishwasher cycle or four hours of browsing on your laptop.

Gas companies use a formula to convert your consumption from the cubic metre measurement shown on your meter to the much simpler kWh.

Prepayment meters – A meter that lets you pay for gas and electricity then and there, when you need to use it. These are useful for budgeting and managing energy consumption, though Ofgem research has shown they can frequently be dearer than finding an energy plan online.

Smart meter – A meter that sends your readings directly to your supplier, enabling more accurate bills. Home smart meters come with a screen showing your energy usage, so you can make adjustments to save money and energy.

Standard plan – One to be wary of. This is the default plan you are put onto if you don’t opt for a deal from your energy supplier. The rate you pay varies according to the provider you are with. This is usually the most expensive way to pay for energy.

Standing charge – The fixed charge you pay for having a gas and electricity supply. This also includes maintenance and meter readings.

Tariff Comparison Rate (TCR) – A figure that represents a tariff’s actual cost to you, the consumer. It assumes a medium level of energy consumption and factors in standing charges and discounts to deliver a reasonably accurate price per kilowatt-hour figure. This is the best figure from which to compare energy tariffs online.

So there you have it – just some of the terms energy companies regularly use that can trip up unsuspecting customers. If there are some terms that you think we’ve missed, head to the comments below. Or if you think you may be paying too much for gas and electricity in your home, head over to our Energy Saver to find out how much you can save if you switch.

What are your thoughts? Join the conversation here…

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