Monday, 13 June 2011

Understanding Electricity Prices

The Top Seven Things You Need to Know

  • Utilities companies buy most of electricity wholesale from outside suppliers. A rise in your bill is normally due to a rise in the price of ‘whole sale’ electricity.
  • The ‘wholesale’ price of electricity changes every second but long term factors, such as the rising price of oil, are normally responsible for the extra costs that get passed to consumers.
  • In the UK 99% of the energy market has been cornered by just six companies and experts expect they will all continue raise prices in the foreseeable future.
  • The ‘big six’ companies tend to copy each other’s pricing, if you notice one company rising prices it can be a good sign to get on a fixed tariff with guaranteed prices.
  • Always be prepared to switch supplier. This will force energy companies to be more competitive.
  • You can tackle price hikes and save on energy bills by choosing an online tariff or paying via direct debit.
  • Switch quickly if the signs point to a coming price rise is advisable, as the best offers are often withdrawn beforehand.

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