Energy is an unpredictable commodity, and although we can’t promise to protect you from the changes that may occur, our aim is to be completely transparent and honest with you about how the cost of energy is calculated. At Co-operative Energy, we do things differently. Alongside charging fairly for the energy you use, we make it as simple as possible for you to switch providers, and offer fair, easy-to-understand tariffs. Our online comparison tool allows you to compare your current energy plan with our new tariffs, to find out the cheapest option for you.
How the costs of energy can vary
The two graphs below help to further demonstrate the unpredictable nature of the wholesale cost of gas and electricity. At Co-operative Energy, we appreciate that this may concern some customers, which is why we try to keep our retail prices constant for as long as possible.
When will your costs change?
Some suppliers may purchase their future energy requirements in advance at a fixed cost, which can produce a slight lag effect on prices. This is known as hedging. In this case, when wholesale costs rise, suppliers may not need to increase their retail prices immediately as they purchased the energy before the prices increased. However, in the long run, the retail price of energy does usually mirror the wholesale cost very closely.
How we calculate your energy costs
In order for us to work out the cost of your gas and electricity, you will need to supply us with meter readings. Electricity usage is measured per kilowatt hour (kWh), while gas units need to be converted into kilowatt hours. When we have both in this unit of energy, we can then apply our charges to work out the cost of your electricity and gas.
What makes up your statement
A number of factors make up your energy bill, including the cost of the energy itself, getting the energy to you, known as network charges, government levies and tax. Below is a diagram to reflect how your statement is calculated, which is a typical breakdown of our energy prices for an average energy consumer.
What is the difference between a fixed tariff and a variable tariff?
At Co-operative Energy, our aim is to ensure all of our energy prices are straightforward and fair. The first step in arranging an energy contract is understanding the difference between a fixed tariff and a variable tariff.
A fixed tariff is an energy plan where the price you pay per unit of energy stays at one price for the duration of the term – usually 12 months. This means that if wholesale costs fluctuate, your energy rates will not change. On a fixed term, we will buy all of your energy upfront, locking in your energy costs.
Around 6-7 weeks before your contract ends, we will send you a reminder and provide you with details of tariffs that you can move on to. We like to keep your prices the same where possible, however this is dependent upon the costs we face at the time.
A variable tariff is a flexible energy plan where the price per unit of energy is not fixed, which means that it can move up and down.
The price you pay depends on the wholesale energy price at the time. For example, if wholesale costs fall, you could experience cheaper energy bills, and if they increase, your energy bill may rise. When you sign-up to a variable tariff, we will buy a proportion of your energy upfront, offering one price for a short period of time. Variable tariffs offer flexibility as there is no fixed term, which means you can leave a variable contract at any time with no cancellation fees.
At Co-operative Energy, if changes to your price should occur, we will notify you at least 30 days before they take effect. At this point you can decide whether to change your tariff or move to another supplier.
To browse through our current fixed and variable tariffs, view our products page.