In July 2009, we set a challenge to see how many of you could accurately calculate a standard energy bill. There has been a great response and over 2,700 people have taken part so far. Despite being a common household bill, only a small percentage of people are managing to successfully calculate the correct answer.
The challenge
Below you'll find the energy bill that we used in our energy bill challenge.
Things you need to know
- The gas and electricity rates on the mock bill have two tiers. This means that any units of electricity used below the defined threshold will be charged at one rate and those used above the threshold will be charged at a different rate. So for electricity, the first 222kWh used will be charged at 17.312p per unit whereas the next 441kWh are above the threshold and therefore will be charged at 8.635p per unit.
- You must calculate the total cost of energy used at each tier separately and then add together the four figures to find the total cost of the gas and electricity used during the bill period.
- The bill shows you the gas units used and then converts those units into kilowatt hours.
Step 1
Calculate the cost of the gas and electricity used per tier.
Electricity
Tier 1 - first 222kWh charged at 17.312p
Therefore 222kWh * 17.312p = 3843.26p or £38.43 (£38.4326)
Tier 2 - Next 441 kWh charged at 8.635p
Therefore 441kWh * 8.635p = 3808.03p or £38.08 (£38.0803)
Total electricity = £38.43 + £38.08 = £76.51 (£76.5129)
Gas
6695 units in total
Tier 1 - first 1430 kWh charged at 4.152p
Therefore 1430kWh * 4.152p = 5937.36p or £59.37 (£59.3736)
Tier 2 - next 5265kWh at 2.513p
Therefore 5265kWh * 2.513p = 13230.945p or £132.31 (£132.30945)
Total gas = £59.37 + £132.31 = £191.68 (£191.68305)
Total cost of gas and electricity used is £76.51 + £191.68 = £268.19 (£268.19595)
Step 2
Now you need to calculate the discounts and remove them from the total cost of the bill.
Important note: The discounts received are applied to the total cost of your energy used and therefore BOTH the online discount (5%) and the monthly Direct Debit discount (5%) are applied to the final total of £268.19. You must NOT apply the first discount, and then apply the second discount to your NEW total.
Discount 1 : Online discount 5% of £268.19 = £13.41 (£13.4097975)
Discount 2: Monthly Direct Debit discount 5% of £268.19 = £13.41 (£13.4097975)
Total discount to be applied is £13.41 + £13.41 = £26.82 (£26.819595)
Therefore new bill total: £268.19 - £26.82 = £241.38 (£241.376355)
Step 3
Apply VAT to the bill. VAT is charged at 5% for utilities bills rather than the standard 15%. This is applied to your new bill total.
Apply VAT at 5%: 5% of £241.37 = £12.07 (£12.0688)
Add VAT to final bill: £241.37 + £12.07 = £253.45 (£253.445) rounding up included in final total
Final bill total = £253.45
Challenge 2
Our second challenge was to see if you could work out how to turn gas units into kilowatt hours using the information provided on the bill.
Step 1
The bill provides a breakdown of the calculation used to work out kWh's from units as follows:
Units used * 2.83 (metric conversion factor) * 1.02264 (volume conversion factor) * 39.1 (calorific value) divided by 3.6 (kilowatt hour conversion factor)
Step 2
Apply the units given on the bill to the calculation above to find out kilowatt hours.
213 * 2.83 * 1.02264 * 39.1 / 3.6 = 6695.19 kWhs.
Final answer = 6695 kWh (including rounding)
Make energy bills simpler, clearer and easier
The results of our challenge just go to show that energy bills are confusing the nation. Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "You shouldn't need to be an 'A' grade student to be able to understand your energy bills. It's deeply worrying that only 14% of people have passed what should be a straightforward test - it serves to highlight the fact that large numbers of consumers are in danger of being excluded because energy bills are far more complicated than they need to be. Ofgem is looking to address this, but it's vital that consumers make their voices heard too."