Our energy costs
Energy is an unpredictable commodity, similar to share prices. We can’t promise that we can always protect you from this unpredictable nature, but we can promise to charge fairly for the energy you use and to be completely transparent about how your statements are calculated.
The charts below give some indication of the unpredictable energy costs:
We understand that this could concern customers, so we try to keep our retail prices constant for as long as possible.
Some suppliers are often able to offer fixed prices by buying some of their future energy requirements in advance at a fixed cost. This is known as hedging and can produce a slight lag effect. When wholesale costs rise, suppliers should not need to increase their retail prices immediately as they have bought enough energy in advance, before the costs rose. In the same respect, when wholesale costs fall, suppliers will not reduce their prices straight away. This may seem unfair but it is due to them trying to hold their prices at a fixed price for as long as possible, and in the long run, the retail price of energy does mirror the wholesale cost very closely.
How is your statement calculated?
It might surprise you to know that the cost of energy represents just half of your statement. We have outlined what else is included in the below diagram:
This a typical breakdown of our costs for an average energy consumer.