Annual energy statements How to use them to save £100s

What suppliers MUST include

All regular bills (eg monthly, quarterly) must include the following:

The name of the current tariff

MSE's explanation: the energy market is saturated with tariffs, all with identical sounding names. But, unless you can pin point exactly which one's your tariff, you won't be able to see how much you can save by switching.

The cost of energy in last 12 months.

MSE's explanation: bills must provide the cost of your energy from the last 12 months. If you haven't been with the supplier for this long, it will be based on a shorter time period.

This is a useful tool for quickly seeing how much you're overspending by. Currently the cheapest tariffs cost around £900/year for the average household. If you're over this, switch!

An estimate of the next 12 months' cost.

MSE's explanation: this predicts the cost of your energy for the next year based on what you've used in the last year, assuming you stay on the same tariff and use the same amount of energy.

All customers, whether they get online bills or not, will receive an annual statement before 1 December 2010. This must include:

Conditions of contract, including exit fess & end dates.

MSE's explanation: suppliers should outline the terms of your contract, which includes exit fees and tarriff end dates.

Information about discounts.

MSE's explanation: suppliers must include full info about discounts or premiums that may apply to the tariff compared to standard tariffs where payment is by direct debit.

Switching info.

MSE's explanation: suppliers must include a reminder that customers can switch, along with advice on how to do it. Yet obviously energy providers aren't going to push this - it's not in their best interests. The likelihood is it will only tell you about its own cheaper tariffs. Never rely on that always do a full comparison. See below for full info on switching.

What the new statement DOESN'T explain

What does kWh mean?

MSE's explanation: A kilo watt hour is the meaure used to explain how much energy you use. One kilo watt hour is equal to 1,000 watt hours. For example use an appliance rated at 1,000 watts for one hour and you would be billed for 1kWh.

This is unlike phone bills where you can clearly see the price per minute and relate it to how much you're using.

Confusing terms like debit & credit

MSE's explanation: while you'd usually associate credit with something you owe, in this case credit means when you've paid extra on your energy bill and debit means when you owe the supplier extra.

No explanation of Independant Gas Transporters

MSE's explanation: independent gas transporters (IGTs) are often used by constructors instead of Transco (National Grid) in new build properties as they charge less to fit pipes. One in 20 people are supplied by them instead of Transco.

If that's the case you may have to pay £30-£40 more on top of any comparison quote as the gas provider uses both pipes so must pay Transco and the IGT to supply gas to your house; and this charge is passed directly on to you.

If the MPRN (the meter point reference number, unique to your house) on you bill is 10 digits long and starts with 74 or 75 this means you are supplied by an independent gas transporter. If you're not sure, Energylinx has a useful tool you can use to check.