Your Electricity Bill Explained

The cost of your bill is more than just the price of your energy*

Wholesale electricity costs - 62%

This is the basic cost of the energy itself – known as wholesale energy costs. We purchase energy in advance to make sure that it’s there when you need it. Buying in advance also helps us smooth out what you pay, as wholesale costs can change a lot from day to day.

Delivering the energy to your home - 18%

This is the cost of getting the energy to your home through the network of wires and pipes that covers the country. For every unit of energy you use, we pay a fee to the company who owns the pipes or wires that connect to your home. These fees are agreed with the industry regulator Ofgem and they are effectively a delivery charge for your energy. Fees vary from area to area but every energy company will pay the same in each area.

Looking after your energy account - 9%

These are the costs of taking care of your account. They include all the normal things you would expect from a service provider, like the cost of reading your meter, printing and posting bills, the cost of maintaining call centres to answer customer queries and the cost of collecting money from our customers. This also includes the normal profit we make as a company.

VAT & government obligations - 11%

As well as the standard VAT charge which runs at 5% for domestic energy, the government has introduced several obligations that all energy suppliers are required to deliver. The cost of meeting these obligations is included within your energy prices. Unfortunately it is forecast that these costs will increase through time. Please click on the links below for more information.

• Renewable energy
• Social initiatives
• Carbon Emissions Reduction Target (CERT)
• Profitability of energy retailers
• In the media