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Independent

Lots of hot air: How to decipher complex gas and electricity bills

Most consumers admit to being stumped by complicated utility bills, says John Cradden, but there are ways to get your head round it.

Do you understand your electricity or gas bill? When you glance at your bill do you know straight away when you're being overcharged or there is a billing mistake? Can you tell when your meter reading is ' actual' or ' estimated'? Do you know what the standing charge, unit rate or the PSO levy is?

If you can answer yes to all these questions, it seems you are in the minority, according to a couple of recent studies. Research found that consumers are being "bamboozled" by overcomplicated bills, with many feeling they have no choice but to rely on suppliers getting their bills right.

The survey, which looked at a variety of household bills, found that half of people find it difficult to check their electricity and broadband bills, while 56pc struggle to check their gas bills.

The main bugbears in this regard are that they are simply too complicated (29pc), use too much meaningless jargon (30pc) and that the bills seem to be laid out in such a way as to make it difficult to find information (24pc).

Just over half of consumers say they are likely to spot an error, but then again the same study reveals that half of them do not even check their bills, and just basically hope and pray that their supplier will get the bills right.

Of course, the reality is that suppliers do get things wrong and that if you're not vigilant about this, it could end up costing you.

The Commission for Energy Regulation ( CER) recently published an annual customer- care report showing that more than three-quarters of the complaints it investigated in the electricity and gas market last year involved inaccurate billing, incorrect account details, problems with budget plans and large 'catch- up' bills when successive previous statements were based on estimated readings.

To be fair to the suppliers, it's debatable whether electricity and gas bills could be made much simpler than they are at the moment. I'm as guilty as most of you are in failing to analyse my utility bills with any kind of rigour unless the charges seem unusually higher than usual. But if they are, a few minutes with a calculator (perhaps with the help of your partner or housemate) should be enough to figure them out.

Electricity Let's take electricity.

There's the unit charge, which is the rate you pay per kWh of electricity, while the consumption or usage figure is the number of those kWh units you actually use during the billing period.

There should be an ' A' or an ' E' next to the usage figure; A means the actual and correct reading while E stands for estimated.

Where it gets slightly more complicated is the standing charge, which are fixed charges you pay for getting your electricity in the first place, regardless of how much you use.

There are four different classes of electricity standing charges: Urban 24hr; Urban Nightsaver; Rural 24hr; Rural Nightsaver.

The standing charges and the unit rates are the figures that vary by supplier, so once you have your head around these, this should enable you to take the next step, which is to compare these charges and maybe even switch to a better value supplier.

By far the easiest way is to use a price comparison website like Bonkers. ie (accredited by the CER).

Then there's the PSO levy, a tax charged to all electricity customers in Ireland made up of various subsidy schemes to support the State's renewable energy efforts, as well as indigenous fuels ( peat) and security of energy supply.

The current PSO annual levy charge is €60.09 (excluding VAT), and is the same across all suppliers. However, the bad news is that the CER is proposing a massive 32pc hike in this rate from October, which means that every household would end up paying €90 a year. Finally, there's the VAT: 13.5pc VAT is charged on all energy products, including the PSO levy.

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