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The tariff information label

All energy suppliers have to publish their tariff information label to enable a standard comparison between electricity and gas offers on the UK market.

What is on the tariff information label (TIL) ?

The tariff information label is a document that lists the following:

  1. The supplier’s name;
  2. the tariff name;
  3. the tariff type: variable, fixed price, green, etc.;
  4. the payment method: quarterly on receipt of bill, direct debit (monthly/quarterly), etc.;
  5. the unit rate: what a single unit of electricity (kWh) costs;
  6. the standing charge: this is a price per day that customers pay regardless of consumption;
  7. the tariff end date, if applicable;
  8. whether or not the price is guaranteed until a given date;
  9. whether or not the supplier charges early exit fees and how much they are;
  10. whether additional products or services are included in the supplier’s tariff.

This information enables suppliers to estimate average costs based on average UK household energy consumption, i.e., 3,200 kWh for electricity and 13,500 kWh for gas. Suppliers provide:

  1. the estimated annual cost, including VAT;
  2. the estimated monthly cost, including VAT, which is the annual cost divided by 12;
  3. the tariff comparison rate, including VAT, in pence per kWh.

The national energy regulator Ofgem provides an template for tariff information labels but not all suppliers make this information available, though they should.

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How to use the tariff information label (TIL)

The tariff information label allows for a standard comparison of tariffs and tariff types.

The most useful item on the tariff information label is the tariff comparison rate (TCR)

The tariff comparison rate (TCR) allows for standard unit rate comparisons of all energy suppliers and can be adapted to household consumption. For example, if a supplier’s tariff information label gives 15p/kWh as the tariff comparison rate, a household using 5,000 kWh of electricity per year can work out estimated annual costs for each supplier by multiplying consumption by the TCR:

5,000 kWh x £0.15 = £750 of electricity per year

The tariff information label provides information on potential hidden costs

Suppliers advertise tariff bonuses (e.g., loyalty points and discounts) better than they communicate on costs that are not taken into account into price calculations (e.g., early exit fees). The tariff information label forces energy suppliers to list each component, financial or otherwise, of a given electricity or gas tariff.

Estimated annual costs on the tariff information label can be misleading

TIL estimated annual costs vary from one distribution area to another and when suppliers’ tariff information labels are national, as some are, the tariff comparison rate may not be accurate. More importantly, the estimated annual cost on a tariff information label rests on UK average energy consumption (3,200 kWh a year for electricity and 13,500 kWh for gas), which can be higher or lower than your consumption. The TIL is therefore purely indicative: do not expect TIL estimated annual costs to be your own.

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