Tariff.com Jargon Buster

June 4, 2021 by Admin

Let’s face it. When it comes to acronyms, the energy sector is no picnic.

If understanding the volatile energy market wasn’t hard enough, consumers attempting to improve their knowledge of the industry are often met with a sea of jumbled letters and obscure terms.

At Tariff.com, we understand that knowledge is very much power; power to know when you’re paying too much and how to save your business money on its energy bills.

That’s why we’ve put together this handy jargon buster to help you get to grips with some industry-specific terminology.

 

The Basics

Ofgem– Office of Gas and Electricity Markets, a regulatory body for the electricity and gas markets in the UK, charged with protecting consumer rights and helping to establish a fairer and greener energy system.

Transmission Network– A network that carries high voltage electricity from power stations to where it’s needed in the country.

Distribution Network– Delivers lower voltage electricity to homes, businesses and industries across the UK.

DNO– Distribution Network Operator, a company that’s licensed to distribute electricity.

IDNO– Independent Distribution Network Operator, also licensed to distribute electricity but often on a smaller, local level within a larger DNO.

Energy Ombudsman– A independent party used to resolve disputes between a supplier and consumer. Free to use and its decisions are binding.

LOA– Letter of Authority- A legal document that allows a third party to deal with suppliers on your behalf.

 

Tariff Options

Fixed-rate tariffs– Can guarantee the price of energy for a fixed time period e.g. 12 months, offering a fixed price for each unit of power.

Pros: Helpful for controlling budgets and avoiding price rises.

Cons: May be charged an exit fee if you break your contract early.

Variable tariffs- The price will vary with the market, fluctuating up and down depending on conditions.

Pros: Can be a cheap option if prices continue to lower.

Cons: Prices can rise and you end up paying more.

Capped tariffs- the cost of energy per unit is capped at a specified level and cannot rise above that price.

Pros: Offers a degree of stability but allows you to benefit from lower prices.

Cons: Might not be the cheapest option and there’s often a cancellation free to leave your contract.

Unlimited energy tariffs- Offer unlimited energy for a year at a specified cost, which is determined by examining old bills. You’ll never be charged additional fees for using more energy.

Pros: One charge regardless of energy usage.

Cons: If you end up using less energy, it could end up being a more expensive option.

Pre-payment tariffs- a pay-as-you-go option for houses with a pre-payment meter, you pay for energy before you use it via a key, card, or token.

Pros: Gives you total control of how much you use and spend.

Cons: An expensive option for buying energy

Green tariff- tariffs that use green or carbon offset energy to power homes and businesses.

Pros: Often better for the environment.

Cons: Sometimes the more expensive energy option.

 

Billing Jargon

Billing period- A period of time that’s used to calculate how much you need to pay.

Estimated meter reading- Estimation of your average energy usage to calculate your bill.

Meter Readings- Used to measure your energy consumption and calculate a bill.

Standing charge- A daily charge you incur even if you don’t use any energy.

Balance- How much you owe to the energy company.

Consumption- Total energy units used within a specific period, measured in kilowatt hours (kWh).

 

 

Energy Units

Kilowatt (kW)- Unit of electric power, equal to 1000 Watts.

Kilowatt hours (kWh)- Unit of measurement for energy consumption.

 

Still Confused When It Comes to Your Business Energy?

If so, why not let Tariff.com take care of all your energy concerns for you. With our expert consultants on the case, you can be sure you’re getting the best deal for your business and are never overpaying for your energy.