Why don’t we include energy firms’ kilowatt hour costs in our weekly email?

I always suggest, when you’re doing an energy comparison, to enter the kilowatt hours (kWh) figure from your bill, if possible, as it gives a more accurate result than entering the cost. (Though the sin of inaction is far greater than the sin of inaccuracy – so if you’re unsure, don’t be put off.)

That’s because a kilowatt hour is a measure of energy consumption, so it defines your exact usage – put the price in and comparison sites need to try to estimate how much you use exactly.  

On the back of this, we occasionally get people a tad frustrated that we don’t include the kWh cost in our weekly email, or when we talk about one of our collective tariffs (see the current collective deals ASAP). Here’s a typical example I received the other day...

“My reason for wanting to write is I was reading your email about energy prices and found it really unhelpful in the way you put average consumption comparisons rather than kilowatt price. I have no idea if I am an average user. I expect not. Having just signed up for a two-year fixed deal I still don’t know from your site if I got a good deal. Could you add the kilowatt price please in future so we can compare like with like? After all, you call out other companies that do this, such as supermarkets.” 

I think this question is based on a few small confusions, so I wanted to quickly bash out an answer (partly so I can link to it in future if people ask the same thing).

  1. Comparing kilowatt hour prices isn’t the same as comparing energy cost. Your energy bill is made up of two factors…

    a) The standing charge (roughly akin to telephone line rental)
    b) The cost per kilowatt hour (to keep up the same analogy, equivalent to call costs)

    So a tariff that has cheaper kilowatt hours isn’t necessarily cheapest, as it may have a high standing charge. It is the interaction of the two, based around an individual’s usage, which dictates the exact cost.

  2. There is no standard kilowatt hour price for most tariffs. Energy tariffs are almost always regional. So they have different rates depending on where you live in the UK. In some cases these can be radically different.

    Recently we reported in the weekly email on an EDF tariff that was very cheap in some regions and totally uncompetitive in others. So we can’t even list a standing charge and kilowatt hours number, as they vary.

  3. We always link to a comparison. We found the simplest way to give people a loose indication of tariff competitiveness in general articles is to quote the average price (across the UK) based on the regulator Ofgem’s definition of what a typical user is.

    This then gives a decent, though not foolproof, indication of the scale of savings in proportion to how much of an average tariff you use. (For example, the average bill on a standard tariff with a big six provider is £1,200, so if your bills are less you’ll save less than we say. If they’re more, you’ll likely save more.)

    Yet as we always say, “your exact price and saving depend on where you live and how much you use”, which is why we always do a link via our comparison – which gives you an exact answer, exact saving and shows you whether the tariff is actually competitive for you.  

    Then within the comparison you can see the exact standing charge and kilowatt hours price for someone with your postcode if you choose to.

Hopefully this explains why we do it the way we do. The email above says: “You call out other companies that do this”. And that’s right – in fact I was very anti the old ‘tariff comparison rate’ that comparison sites and energy firms were asked to include in their results, and you could argue this was akin to the average price we write.

Yet the difference is that that was giving someone a typical figure when you KNEW their actual figure, which seems pointless – what’s the point of doing a comparison to then be given an average figure? We give the typical figure when writing a broad article, but give an exact answer when we can, ie, when we know your details.

I hope this explains it.