A
Advanced Meter - Meters that automatically pass accurate meter readings to energy suppliers.
Amp - An amp is electrical current.
Annual Bill - The amount that a customer would have to pay for gas, electricity or both over one whole year.
Annual Quantity (AQ) - The term used to describe the annual consumption of a gas customer’s meter.
Annual Statement (also known as Annual Gas/Electricity Summary) - A written document that suppliers must provide to each customer, each year. The Annual Statement contains a range of key tariff information, including tariff name, consumption over the previous 12 months and estimate of annual cost for the next 12 months.
Annualised Advance - The actual rate of consumption over a period between two actual meter readings.
Apparent Power - Apparent power is equal to the product of volts and amps.
Applying supplier - The future supplier of a meter, also known as the incoming supplier or new supplier when subject to a transfer.
APR - Describes the interest rate for a whole year, rather than just a monthly fee or rate, as applied on a loan, mortgage, credit card etc. It is a finance charge expressed as an annual rate.
Authority, The - The Gas and Electricity Markets Authority, sometimes referred to as GEMA, that acts as our governing body.
Automated Meter Reading (AMR) - automatic collection of data from meters which is transferred to a central database for billing and/or analysis.
Automatic Contract Rollover (Auto-Rollover) - Where, due to the terms of a contract, a supplier has the ability to extend the duration of an existing Fixed Term tariff or apply a new Fixed Term tariff without a consumer’s positive assent.
Availability - See Capacity.
Available Supply Capacity (ASC) - The maximum amount of electricity that can be drawn via the meter at any point. Measured in KVA.
B
Balancing and Settlement Code (BSC) - The rules that govern the settlement and metering systems in the electricity market. Managed by ELEXON.
Balancing Mechanism - The mechanism by which electricity demand is matched with electricity generation as near to real time as possible. It currently operates from three and a half hours ahead of delivery of the power up to the actual time of delivery.
Barrier to entry - A factor that may limit a firm’s ability to enter the market.
Barrier to expansion - A factor that may limit a firm’s ability to increase in size.
Baseload Demand - Minimum demand experienced by a generating plant.
BEIS (Business, Energy and Industrial Strategy) - The UK government department in charge of energy matters in the UK, and international climate change matters.
Big 6 - The major energy suppliers in the UK: BGB, SSE, nPower, E.ON, Scottish Power and EDF
Bundle discount - Any form of payment, saving, rebate benefit or reward that is in any way linked to a Domestic Energy Supply Product, and which involves the provision of any goods or services which do not relate to energy supply. One example is a supermarket voucher.
Bundled Products/Services (Bundles) - An opt in bundle for the purpose of this proposal is when consumers can add on additional services/products to their energy offering. A tied bundle for the purpose of this proposal is a form of pure bundling where it is tied/mandatory to buy the entire bundle to receive all the products and services offered, i.e. the specific energy offering is only available with this particular bundled form. An opt out bundle for the purpose of this proposal is a when a consumer is presented with an entire bundled product and they are required to opt out of the additional services if they wish to only purchase the energy element of the bundle or if they wish to opt out of any one of the elements of the bundled product.
Buy-Out Fund - Where a supplier is unable to meet the RO (Renewable Obligation) they must make payments into a fund for renewable investment.
C
Calorific Value (CV) - The quality of gas measured by the release of energy when gas is completely combusted under specified conditions.
Capacitance - The property of a capacitor that determines the quantity of electric energy that it can store.
Capacitor - A device consisting of two conducting surfaces separated by an insulator and having the ability of storing electric energy. Also called a condenser. Capacitors can be installed to control and improve the power factor.
Capacity - Supply Capacity (or Availability), as ASC, is a limit on monthly maximum demand agreed between the user and the regional distributor (normally via the supplier). Measured in kVA.
Capped price - A tariff which guarantees that the price per kWh for gas/electricity will not rise beyond a certain level for a fixed period.
Change of tenancy - The situation where a business energy customer moves in to a premise without a contract being in place.
Charges - The presentation of unit rate, or a fixed monthly/daily amount that you pay your electricity/gas supplier for maintenance and other costs, such as maintaining connection to the power network.
Climate Change Levy (CCL) - A customs and excise levy charged to most commercial users of electricity since 2001. The levy is applied at a fixed rate per kilowatt hour. Levied on businesses to incentivize the use of renewable to increase efficiency and reduce carbon emissions
Code of practice - A set of guidelines and principles to be followed by members of some profession, trade, or group. In this case, energy suppliers.
Combined Heat and Power (CHP) - A power generation plant which produces electricity and uses the waste heat generated to warm a building or buildings. This may be small scale inside a factory or large scale where heat from a power station is used to provide heating for a local district containing domestic, commercial and industrial premises.
Communication Charges - Communication charges cover the cost of the telephone line or cellular link used for remote access to the electricity meter. This applies to half-hourly metered sites only. Communication charges can be billed to the customer by either the meter operator or the supplier.
Communications Service Providers (CSP) - The telecommunications businesses, Arqiva & Telefónica who will facilitate the full functionality of smart metering.
Confidence Code - Comparison websites approved by Ofgem to offer a trusted online tariff comparison service. Approved sites carry the Confidence Code hallmark.
Consumption - The absolute usage of a meter, derived from the meter advance and applicable to any time period, most often annual.
Contract End Date - The end of a fixed price period, the supplier will supply past this date until the supply end date.
Contracts for Differences (CfDs) - Replacement for RO, mechanism for top-up payments to renewable plants when electricity price is below a set level.
Cooling- off period - Usually refers to a period of time after the consumer has entered into a contract or signed up to a tariff during which they can reverse their decision without incurring any cancellation fees.
Core tariff - The charges for supply of electricity/gas combined with all other terms and conditions that apply or are in any way linked to a particular type of contract. For the supply of gas/electricity to a domestic customer excluding certain matters such as dual fuel discounts, variations in charges relating to payment method, appropriate surcharges and optional additional services or products.
Correction Factor - The measure used to convert cubic meter gas units into kWh, the standard correction factor is 1.02264.
Credit Score - A snap shot indicator of a business’ credit worthiness used to determine the products, rates and terms suppliers will offer.
Cross subsidise - The part financing of one product or activity by another.
D
D0010 – Meter Readings - The flow that communicates Meter Readings taken from a customer meter to the industry.
D0019 - Metering System EAC/AA Data - Derived from the D0010, the flow communicates the estimated annual consumption of a meter.
D0036 - Validated Half Hourly Advances for Inclusion in Aggregated Supplier Matrix - The flow that contains the meter readings, demand and advances of a Half Hourly Meter.
D0055 - Registration of Supplier to Specified Metering Point - Registers the supplier’s intent to register a meter to their portfolio.
D0057 - Rejection of Registration - Reports a rejection of the D0055 because certain critical industry data does match that held by MPAS.
D0058 - Notification of Termination of Supply Registration - Informs the incumbent supplier that the new supplier is intending to take ownership of the meter on the date stated.
D0064 - Notification of an Objection to Change of Supplier Made By the Old Supplier - Notification that the incumbent supplier is ‘objecting’ to the transfer of the meter point to the new supplier.
D0067 - Notification of an Objection to Change of Supplier Sent to the New Supplier - Sent to the new supplier to inform them that the incumbent supplier has objected to the transfer of the meter.
Data Aggregator (DA) - The entity that sums the meter readings gathered in order to identify the demand levels in any combination of meters.
Data and Communications Company (DCC) - The entity responsible for linking the 53 million smart meters with the systems of the energy suppliers and network operators.
Data Collector (DC) - The entity that collates the meter readings and attributes them to metering systems, customers and suppliers.
Data Flow - Flows transmitted between the MOP, DC, DA, MPAS, Supplier and Distributor via the DTN facilitating actions in the competitive market.
Data Retriever (DR) - The ‘man in the van’ who reads meters; in a Smart Meter this can simply be a SIM card.
Data Service Provider (DSP) - The entity that operates the system controlling the movement of smart meter messages, a smart meter era DR and DC.
Data Transfer Catalogue (DTC) - The dictionary of the various flows, activities and participants within the DTN.
Data Transfer Network (DTN) - The data network that enables automated communications between the relevant market participants facilitating change of supplier activity.
De Minimis - If the amount of electricity supplied to a commercial site is less than 33 kWh per day over a billing period then de minimis applies and VAT is charged at the reduced rate (currently 5%).
Dead tariff - A tariff in respect of an evergreen contract which is no longer capable of being entered into by all domestic customers.
Deemed Contract - A contract where a customer takes a supply of electricity, gas or both in a manner otherwise than under a contract that has been expressly entered into with a supplier.
Deemed rates - Standard charges applied to Change of Tenancy customers before they agree or refuse a contract with the incumbent supplier.
Default tariff - Default and standard variable tariffs are a basic tariff from an energy supplier. They are typically poor value and more expensive than a non-default, fixed-term tariff, which you can choose to switch to. You will often need to renew fixed-term tariffs after a year or more. Names of default tariffs vary, so if you aren’t sure if you are on one look at your last bill for your tariff details and then contact your supplier to check.
Delphi - The numeric score provided by Experian to represent a business’ credit worthiness.
Demand - The rate at which electric energy is used in any instant or average over a period of time. Usually expressed in kilowatts (kW) or kilovolt-amperes (kVA). See also Maximum Demand.
Department for Energy and Climate Change (DECC) - The UK government department responsible for policy in the fields of energy and climate change.
Derogation - An exemption from or relaxation of a rule (which may include the imposition of alternative rules).
Determination - A determination is a binding decision by us, including our reasons, in relation to a dispute referred to us under the Acts or the relevant licence provisions. The circumstances in which a dispute between a licensed energy network company and a customer may be referred to the Gas and Electricity Markets Authority (“the Authority”) for determination are set out in publication: Ofgem guidance on determination of disputes.
Direct debit (DD) - A method of payment where a fixed or variable amount is taken from a bank account each month, quarter or year.
Discount - Any form of payment, saving, rebate benefit or reward that is in any way linked to a Domestic Energy Supply Product. One example is the dual fuel discount.
Distribution Network (Distributor) - The 14 ‘regional’ networks that connect to the transmission system and manage electricity distribution to homes and businesses
Distribution Network Operators (DNOs) - DNOs are ex-Public Electricity Suppliers that came into existence on 1 Oct 01. There are currently 14 Distribution Network Operators (DNOs) in the UK.
Distribution Use of System (DUoS) - The charges related to a meter’s usage of the distribution network representing around 18% of the average business energy bill.
Domestic customer - A customer that uses energy for non - commercial purposes.
Domestic energy suppliers - Companies who sell energy to and bill domestic customers in Great Britain.
Dual Fuel (DF) - A type of energy contract where a customer takes gas and electricity from the same supplier (or two affiliated suppliers).
Dynamic Teleswitching (DTS) - A particular type of electricity meter where the tariffs have a control unit that allows the supplier (or distribution company) to switch the metered supply remotely by radio teleswitch. The Radio Teleswitching Access Provider controls the radio switches, and therefore heating load, following instructions from the supplier.
E
Economies of scale - Where the average costs of producing a good or providing a service falls as output increases.
Economy 7 / Economy 10 - A type of tariff that has different unit rates for consumption during the day and during the night. The number following Economy refers to the number of hours for which night-time rates are available.
Economy 7 Meter - A two-rate meter to provide cheaper energy off-peak between 1am and 8am and commonplace in bakeries and take-aways.
ELEXON - The party that manages the BSC focusing on settlement processes, metering systems & managing supplier adherence to industry rules.
Embedded generation - Small scale generation, often renewable, that is in place at a site of an energy consumer and not a generator.
End of Fixed Term Notification - A communication from a supplier to a consumer, indicating that the fixed term period of the consumer’s energy supply contract is due to expire, and setting out the arrangements that the consumer will default to and the options available to the consumer to act in response to this notification.
Energy consumption - The use of gas and/or electricity as a source of heat and power. Usage is measured by an energy meter.
Energy meter - The device used to record how much gas and/or electricity is used.
Energy Ombudsman - Part of the Ombudsman Service covering the communications, energy, property and copyright licensing industries to whom escalated complaints are made.
Energy Supplier - The entity that is the retail business who bills and services end user customers e.g. BGB, nPower, E.ON.
Energy supplier or energy company - An energy company licensed by Ofgem to supply gas and/or electricity.
Energy tariff - Tariffs are what energy suppliers charge you for gas and electricity. If you don't know what your energy tariff is, contact your energy supplier or check your last energy bill. You can find your supplier's contact details on your gas or electricity bill. You should talk to your supplier or look at their website to see what tariffs they have available and if you can pay less. You can also use a price comparison website to see if another supplier can offer you a better tariff. If you’ve never switched energy supplier or have switched only once, you’re likely to be on a more expensive ‘default’ tariff. Default tariffs, including standard variable tariffs, are a basic tariff from an energy supplier. A prepayment meter tariff means you pay upfront for your gas or electricity use. You can ‘top up’ using an app on your phone, by text or through a token or key card at a shop.
Estimate of consumption - Estimate of the amount of energy used in a particular period of time, for example over the last three months.
Estimated Annual Consumption (EAC) - The term used to describe the forecast annual consumption of a electricity customer’s meter in lieu of an Annualised Advance.
Estimated annual cost/personal projection - The estimated cost of energy to a consumer over a 12 month period, based on a specified methodology and the best available information about that consumer’s consumption.
Evening Weekend & Night Meter - A three-rate meter measuring day evening / weekend & night usage. Commonplace in pubs, nightclubs and restaurants.
Evening Weekend Meter - A two-rate meter measuring day & evening / weekend usage. Commonplace in bakeries and take-aways.
Evergreen contract - A tariff which is for a period of an indefinite length and which does not contain a fixed term period.
F
Feed in Tariff (FIT) - A scheme to incentivise renewable energy generation. Levied on all consumers to reward those businesses with eligible generation.
Fixed price - A tariff where the price per kWh for gas/electricity will not change for a set period of time.
Fixed-term tariff - A tariff with specific terms applying to the contract conditions. Usually these lock-in a price for a year or more, amongst other services.
Forwards contract - An agreement to buy electricity from another party at a specified time in the future at a specified price with money changing hands at the delivery date.
Fossil Fuel Levy (FFL) - A forerunner of Climate Change Levy, introduced in 1989 and which has been rated at 0 since 2002.
Fuel poverty - Those households who need to spend more than 10 per cent of their annual income on fuel to maintain an adequately heated home are considered to be in fuel poverty.
Futures contract - Similar to a forwards contract these are normally traded through an exchange on standard contract terms with profits or losses calculated and paid daily.
G
Gate closure - In relation to a settlement period, the time 3.5 hours before the start of that settlement period. It defines the moment when bilateral contracting ends and the Balancing Mechanism for each associated trading period begins.
GEMSERV - The private business contracted to operate the MRA as MRASCO and the SEC.
Generators - The producer of electricity using coal, gas, hydro, oil, wind or waves but whose fundamental principle remains the same.
Giga Watt Hour (GWH) - 1,000,000 kWh, 1,000 MWH.
Gigawatt - The equivalent to one thousand megawatts or one million kilowatts (kW).
Global Complex - The connected nature of the globalised energy market whereby e.g. demand in Japan can affect supply and price in the UK.
Green Deal - A scheme that allows householders to improve the energy efficiency of their homes and repay the cost through energy bills.
Green tariff - A tariff that is promoted primarily on the basis of its association with renewable energy sources and/or climate change mitigation.
Grid - The network that transports energy from source to destination. Also describes the payment market between suppliers & generators.
Grid Supply Point (GSP) - The point in each regional distribution network where the transmission network connects to it.
H
Half Hourly Data (HHD) - Data sourced from a half hourly meter delivering 17,520 recordings of demand from each meter.
Half Hourly Meter (HH Meter) - A high demand meter (>100kW) that records and transmits usage every half hour.
Half-hourly Metering - Since April 1998, half-hourly meters have been mandatory for all sites over 100 kVA, and voluntary for sites under 100 kVA. This meter sends consumption data by telephone or radio every half-hour to a central data bank. The supplier will then access this information from the data bank and bill the user accordingly.
Headroom - This allows suppliers to offer competitive deals underneath the set level of a price cap. It is calculated as a proportion of other cost elements.
High user - A consumer who annually uses 5.100 kWh of electricity and/or 23.000 kWh of gas.
Higher Distribution Cost Levy (Assistance for Areas with High Electricity Distribution Costs) - A charge to reduce the cost of the distribution of electricity in certain areas such as the North of Scotland.
I
Imbalance - A situation where there is a difference between the amount of power produced (supply) and the amount of electricity contracted or sold (demand). At such times spare capacity in the system can be brought on stream, normally at a much higher cost than the contracted price.
In-area customers - Customers of an electricity supplier who are located within the supplier's original ex-PES region.
Incumbent supplier - The current supplier of a meter, also known as the outgoing or old supplier when subject to a transfer of supply. See ex-PES suppliers (DNO’s).
Indirect costs - These include supplier operating costs and are inflated by the Consumer Price Index.
Industrial & Commercial - Those customers that consume more than 300,000kWh of gas or electricity per annum and often those electricity customers fitted with a half hourly meter.
Interconnector - A cable connection allowing electricity to flow between two countries or markets. There are interconnectors between the north of England and Scotland and between the south of England and France.
Intermediary - An organisation that can help consumers to switch energy tariffs.
Interruptible Supply - Specialised contracts for intensive gas users to cut demand in peak periods to balance the network.
J
K
Kilovolt Amperes (kVA) - A measure of electrical load on a circuit or system. The units used to measure apparent electric power or “true power”. For billing purposes maximum demand measured in kilowatts (kW) is converted to “true power” in kilovolt amperes (kVA) by dividing by the power factor. Maximum demand and capacity charges are billed using kVA rather than kW.
Kilowatt (kW) - A measure of power output or demand of a particular item, it is equal to one thousand watts. One kilowatt (kW) equals 1,000 watts.
Kilowatt Hour (kWh) - A measure of electrical energy. One kilowatt hour (kWh) of energy is the energy produced by one kilowatt acting for one hour, 1,000 watt-hours or 3.5 mega joules. Electricity meters record in kilowatt hours and electrical consumption is billed on kilowatt hours. kWh is also used to measure gas consumption.
Kyoto Protocol - An international agreement signed in December 1997 that introduced emissions targets to be achieved by the period 2008 - 2012.
L
Large energy suppliers (Big Six) - The large energy suppliers (often also called the 'Big Six') are the companies that hold supply licences and supply most of the energy to domestic households in the GB market. They are: Centrica plc (parent company of British Gas), E.ON UK, Scottish and Southern Energy (SSE), RWE npower, EDF Energy and ScottishPower.
Levy Exempt Power - Electricity from a non-fossil fuel source of generation e.g. renewable energy and therefore not liable for CCL.
Licence condition or obligation - All energy companies must operate under a licence condition (or exemption/exception) if they supply gas and/or electricity services. These are administered by Ofgem and relate to the Gas Act 1986 and Electricity Act 1989.
Line Loss Factor (LLF) - A multiplier applied to a meter & used to estimate the losses in transporting energy along the distribution network.
Liquid Natural Gas (LNG) - Gas converted & compacted to less than 1/600th of its gaseous state to facilitate ease of transportation over long distances.
Liquidity - Availability of commodity in a traded market, the higher, the stronger liquidity and lower the influence of a single transaction.
Load Factor - Ratio of average energy demand (load) to maximum demand (peak load) during a specific period. Usually stated as a percentage, or number of hours used. Measured by a Maximum demand meter.
Load Profile - The pattern of a meter’s electricity usage by period to a half hour granularity. Eight profile classes represent standard profiles.
Losses - Energy is lost during transportation, metered demand is therefore subject to a loss factor to gross up demand to include losses.
Low user - A consumer who annually uses 2.100 kWh of electricity and/or 11.000 kWh of gas.
Loyalty discount - A discount that is paid at a pre-specified point in time if the consumer does not switch energy suppliers.
M
Market Segmentation - The process of splitting customers, or potential customers, in a market into different groups, or segments.
Market Share - The proportion of total customers (usually as proxied by the number of meter points) within a market that are registered to a particular supply group.
Master Registration Agreement (MRA) - The rules that govern the DTN and underpin the registration processes of the electricity market. Managed by MRASCO.
Maximum Demand (MD) - The measure of the highest peak of electricity flow into the site during a half-hour period, in the period of a month. Measured in either kW or kVA.
Maximum Demand Meter (MD Meter) - A meter that measures the maximum energy ‘demanded’ at specific points & the absolute consumption to provide the load factor
Measurement Class - The aggregation & settlement classification for a meter i.e. Non-Half Hourly or Half Hourly.
Medium user - A consumer who annually uses 3.300 kWh of electricity and/or 16.500 kWh of gas.
Mega Watt Hour (MWH) - 1,000 kWh.
Megawatt - The equivalent to one thousand kilowatts.
Meter advance - The gap between two-meter readings derived by subtracting the earlier read from the later.
Meter Asset Manager (MAM) - The entity who maintain the meter installed in a premise.
Meter Asset Provider (MAP) - The entity who owns the meter installed in a premise.
Meter Operator (MOP) - The collective name for the MAM and MAP, the owner and maintainer of a meter installed in a premise.
Meter Point Administration Number (MPAN) - A 21 digit reference, used to uniquely identify the electricity supply point. Although the name suggests that an MPAN refers to a particular meter, an MPAN can have several meters associated with it.
Meter Point Reference Number (MPRN) - The unique reference applied to the gas supply point in a premise, the gas industry version of the S Number.
Meter reading - A meter reading based on the actual amount of energy you’ve used.
Meter Serial Number - The non-unique serial number of a gas or electricity meter, used to identify the meter and not the supply point.
Meter Timeswitch Code (MTC) - Identifies the rate/time periods that a meter will support to measure meter consumption across differing periods.
Micro Business - A business using under 100,000kWh of electricity, 293,000kWh of gas, with fewer than 10 staff and turnover less than €2m.
Micro business consumer - A non-domestic consumer is defined as a micro business if they meet one of the following criteria: employs fewer than 10 employees (or their full time equivalent) and has an annual turnover or balance sheet no greater than €2 million; or uses no more than 100,000 kWh of electricity per year; or uses no more than 293,000 kWh of gas per year. A business using 100,000 kWh of electricity or 293,000 kWh of gas should typically pay around £10,000 - £12,000 a year for each fuel (excluding VAT and Climate Change Levy).
Micro Watt Hour - 1,000,000th of a kWh.
Milli Watt Hour - 1,000th of a kWh.
MPAN Core - The unique reference for a metering system at a supply point. The ‘bottom line’ of the S Number.
MPAS - The 14 regional areas that hold centralised data about each customer meter and supply point.
MRASCO - The organisation that is contracted to develop and manage the MRA. Operated by GEMSERV.
Mutual variation - An amendment to the terms and/or conditions (including price, but excluding contract duration) of a consumer’s energy supply contract, mutually agreed between the supplier and the consumer. The consumer would not be obliged to accept the proposed variation. The variation can only be binding following express agreement from the consumer.
N
National Grid - The Company that owns the electricity transmission network and the gas pipeline network and is responsible for transmitting the electricity from the generator to the local REC’s area.
Network - A distribution system in which the secondaries of the distribution transformers are connected to common conductors for supplying power directly to a customer's service.
Network Code (The Uniform Network Code) - The legal framework of the gas industry designed to facilitate competition.
New entrant - An entrant that does not have an incumbent customer base.
Non Time of Use tariff (Non-ToU) - A tariff that is not a Time of Use (ToU) tariff.
O
Objection - The process within the registration window where the supplier blocks the transfer due to debt or contracts being in place.
Office of Fair Trading (OFT) - The body established by the Enterprise Act 2002 (which replaced the Office of Director General of Fair Trading) with functions that include enforcing consumer protection law and competition law, reviewing mergers and conducting market studies.
Ombudsman Services: Energy (the Ombudsman) - Ombudsman Services: Energy means the Ombudsman Services provided to Energy Suppliers and Energy Network Operators. The Ombudsman’s principal aim is to receive complaints made by complainants in accordance with the Ombudsman’s Terms of Reference and to consider and, where appropriate, investigate such complaints in order to encourage and/or facilitate the terms of their resolution, settlement and/or withdrawal.
Online Account Management - Where a consumer does not receive a paper version of a bill or statement of account and would need to access the internet and use a computer or communication device.
Online discounts - A discount provided to a customer with online account management.
Online tariff - A tariff for the supply of electricity/gas which may only be entered into via a website, and/or a tariff which must be managed fully or partly by a customer via a website.
Open tariff - A tariff that is available to new and existing domestic customers at any given time.
Out of Contract rates - Punitive rates charged to customers who have refused contract terms yet remain on supply with the supplier.
P
Paperless tariff/discount - Where a customer receives all communications electronically.
Parent supplier - A supplier that owns enough stock in another supplier to have control of management and operations of that supplier.
Pass Through Charges - Elements of the energy price that can be changed and passed through under the contract terms e.g. levies, transportation & metering costs.
Payment method - A method by which a consumer pays for energy. Payment methods are classified into three main categories: direct debit, standard credit and prepayment.
Percentage Day - This refers to the percentage ratio of electricity used in the daytime against that used in the night. This information is used by suppliers to quickly identify the type of profile.
Personal projection - This is based on your actual consumption and is a projection of your future yearly charge. You could compare the personal projection for your current tariff with a personal projection given to you for an alternative tariff by your current supplier, an alternative supplier or a switching site.
Peta Watt Hour (PWH) - 1,000,000,000,000 kWh, 1,000,000,000 MWH, 1,000,000 GWH, 1,000 TWH.
Power Factor - The ratio of active or real power in kilowatts (kW), to apparent power in kilovolt amperes or kVA. Power Factor is normally expressed as a figure between zero and one. Unity power factor is 100% (or 1.0) power factor which is the highest available. In practice 0.99 is the highest.
PP10 - HMRC’s Climate Change Levy Relief Supporting Analysis document intended to prove, via supporting analysis, a business’ claim for relief.
PP11 - HMRC’s document to inform an energy supplier of the level of relief to be applied against a business’ CCL liability.
Prepay or prepayment meter - A prepayment meter tariff means you pay upfront for your gas or electricity use. You can ‘top up’ using an app on your phone, by text or through a token or key card at a shop.
Pre-payment - A method of payment where consumers pay for credit to their account. Their meter deducts credit from the account based on the amount of energy used by the consumer and the rates that apply to the consumer’s tariff.
Price cap - A limit on how much suppliers can charge you per unit of gas or electricity. Price cap levels are set by Ofgem based on how much it costs, on average, to get energy to your home. You could be protected by: prepayment price cap (sometimes called a ‘safeguard tariff’) or, a default tariff cap, introduced by the UK government. Price caps won’t limit your total bill. This will vary depending on how much energy you use.
Price comparison metric - A figure that can be used to compare the cost of the tariff you are on against alternative tariffs from your own or other suppliers. Also called the Tariff Comparison Rate (TCR). The TCR is calculated as the estimated yearly bill, divided by the amount of energy used each year by a typical low, medium or high user of electricity. The TCR takes account of any standing charge and the unit rate(s) that make up the tariff. The TCR is not based on your personal consumption and should be used as a guide only.
Price Increase Notification (PIN) - If a supplier increases the price of a tariff or varies any term which could cause disadvantage to the consumer, then under our licence obligations it must notify the consumer at least 30 days in advance of the date on which the price increase (or other variation) takes effect.
Principal terms - The most important terms of a supply contract, including the charges, duration, amount of any termination fees and any terms which may reasonably be considered to significantly affect the evaluation by the consumer of the contract under which they are supplied with energy.
Producer - The entity who extracts gas through on and offshore wells and deliver it to the market.
Profile Class - A classification representing one of 8 generic demand shapes approximating when a typical customer uses their energy.
Profile Class 1 - A standardised load profile for domestic unrestricted customers using a single rate meter.
Profile Class 2 - A standardised load profile for domestic unrestricted customers using an economy 7 two-rate meter.
Profile Class 3 - A standardised load profile for non-domestic unrestricted customers using a single rate meter.
Profile Class 4 - A standardised load profile for non-domestic unrestricted customers using an economy 7 two-rate meter.
Profile Class 5 - A standardised load profile for non-domestic Maximum Demand (MD) with a Peak Load Factor (LF) of less than 20%.
Profile Class 6 - A standardised load profile for non-domestic Maximum Demand (MD) with a Peak Load Factor (LF) of between 20% and 30%.
Profile Class 7 - A standardised load profile for non-domestic Maximum Demand (MD) with a Peak Load Factor (LF) of between 30% and 40%.
Profile Class 8 - A standardised load profile for non-domestic Maximum Demand (MD) with a Peak Load Factor (LF) of over 40%.
Q
R
Reactive Power - Created when current and voltage are not in phase, measured in var and also known as apparent power.
Reactive Power Charges - Electricity that is deflected by electrical motors and is accounted for by the supplier by billing as a separate item. It is possible to install Power Factor Correction Equipment which will eliminate or reduce the reactive power charges.
Real Power - Real power is the amount of actual power that can be drawn from a circuit.
Regional Electricity Companies (RECs) - The pre-privatisation era description of monopoly regional energy businesses e.g. MEB, now nPower or EMEB, now E.ON. Each REC is responsible for supply to domestic, commercial and industrial customers in its area.
Registration - The process by which a customer is transferred from their existing supplier to their chosen new supplier
Registration Window - The 28-day period prior to the intended transfer date within which the new supplier applies for registration of the meter.
Regulator - Ofgem, the non-customer facing industry regulator responsible for the competitive energy market, a non-ministerial government department reporting to DECC.
Rejection - The process within the registration window where MPAS rejects the application due to mis-matching industry data.
Renewable Obligation Certificates (ROCs) - Certificates of provenance, under the RO presented to Ofgem to prove the source and status of the energy.
Renewable sources of energy - Energy sources that occur naturally and repeatedly in the environment, eg from the sun, the wind and the oceans, and from plants and the fall of water. It also refers to the energy available from wastes and to the emerging clean technology of fuel cells.
Renewables Obligation (RO) - An obligation placed on UK electricity suppliers to source a set % of their energy from renewable sources.
Retail Price - The final price for energy that the customer pays. Consisting of wholesale energy, transportation, metering, losses, levies, & supplier margin.
S
S Number (MPAN) - A unique identifier used in the electricity market to define the supply point for a meter and its generic characteristics.
Safeguard tariff - This is the name we gave to the prepayment price cap when we extended it to 1 million vulnerable households who receive the government’s Warm Home Discount in 2017. This is to reflect the fact that this price cap specifically covered some vulnerable customers. Since these Warm Home Discount customers will be covered by the default tariff price cap from 1 January 2019, this price cap will revert to being called the 'prepayment price cap'.
Seasonal Time of Day Meter (STOD) - A complex meter with up to 56 rates across night, day, peak & other periods measured separately by season.
Self-regulation - Industry regulation without our binding licence conditions or rules contained in legislation. However, if self regulation is not operating as we would hope, licence conditions may be introduced.
Settlement - The process, in the electricity market, total and individual demand is apportioned to each supplier, customer & GSP group.
Settlement Period - Each half hour in the electricity market is a settlement period within which total and individual demand is apportioned.
Settlement Register - A register on a meter related to a time period & used in the industry settlement process to determine usage.
Settlements Agency - This is the body that "settles" the distribution of electricity to establish where and to whom the generated load has been distributed to.
Settlements charges - A charge applicable to half-hourly metered supplies. Effectively a standing charge that covers balancing and settlement.
Shipper - The entity that arranges for the gas transporter to move the gas from the producer to the customer.
Signposting - A prompt to consumers that they can consider switching tariff or supplier.
Small & Medium Enterprise (SME) - Independently owned businesses. Small: below £2.8m turnover & 50 employees. Medium: below £11.2 million turnover & 250 employees.
Small suppliers - Suppliers which operate in the domestic gas and electricity market but do not hold significant market share. This can refer to all suppliers other than the Big 6.
Smart Energy Code (SEC) - The multiparty agreement that sets out the contractual relationship between the DCC and the DCC Service Users. Operated by GEMSERV.
Smart Meter Roll-Out - The government project to install 53 million Smart & Advanced Meters between 2015 and 2020
Smart meters - Any meter which allows for the identification of consumption in more detail than a conventional meter. Smart meters will generally also include a means of communicating accurate meter readings / information to a central data collection (energy supplier) site for energy management and/or billing purposes. Smart meters also support other functions including enabling smart appliance operation.
Soft Credit Check - A credit check that leaves no footprint on financial records yet determines the products, rates and terms suppliers will offer
Spill - Embedded generators releasing surplus energy to the ‘grid’ to take advantage of price opportunities as a traditional generator would
Standard credit - When you arrange payment on receipt of a bill (e.g. each month or once a quarter), rather than paying automatically by Direct Debit or prepayment.
Standard Licence Conditions (SLCs) - The legally binding conditions that licensed gas and electricity suppliers must meet to supply to domestic and non-domestic customers, in accordance with the Gas Act (1986) and Electricity Act (1989).
Standard Meter - A single rate meter, providing a single tariff for all units used. Ideal for offices, shops & cafes.
Standard variable tariff (SVT) - A basic energy tariff with variable prices that can go up and down with the market. These tariffs are often more expensive than a fixed-term tariff. You could be put on a standard variable tariff or a tariff you have not chosen (a ‘default tariff’) if your fixed-term tariff contract ends and you have not chosen a new one.
Standards of Conduct (SOC) - A written policy and procedure that outlines broad standards of integrity and business ethics.
Standing charge - A fixed monthly/daily amount that you pay your electricity/gas supplier for maintenance and other costs, such as maintaining connection to the power network.
Storage - Primarily gas however small amounts of electricity can be stored, with new technologies exploring long-term mass electricity storage.
Structured tariff - Where fluctuations in price through the duration of a contract are set out before the contract is signed.
Supply End Date - The final date a supplier supplies a meter, after which they no longer hold responsibility for the energy delivered.
Surcharge - An additional and exceptional charge added to the usual energy charge(s). This often happens where a supplier requires a customer to pay a fee for leaving a contract before the contract end date.
Switch or switching - The process of moving from one energy supplier to another, or to another tariff with the same supplier.
Switching - The process of changing gas or electricity supplier, or changing to a new tariff with the same supplier.
Switching costs - The costs incurred by customers in finding and switching supplier. Switching costs are classified into a variety of categories, including: transaction costs, contractual costs, uncertainty costs, psychological costs, shopping costs and search costs. In addition to the above, firms can also incur costs when customers switch supplier.
Switching site - An online comparison and switching service that helps consumers to compare prices on a range of products and services.
Switching window - The period in which a consumer is eligible to switch supplier, in response to an End of Contract Notification, in which they will not be subject to any Termination Fees or be required to notify their supplier of their intention to switch.
System Buy Price (SBP) - The price paid in the Balancing Mechanism by a party that requires more energy to meet its contractual commitments. Prices are often volatile and very high.
System Sell Price (SSP) - The price paid in the Balancing Mechanism by a party that has produced more electricity than it had users to buy. Prices are very volatile and often negative, meaning that a payment would need to be made to dispose of the unwanted electricity produced.
T
Tariff - The package of charges and conditions that a supplier offers you for providing electricity, gas or both.
Tariff Comparison Rate (TCR) - The TCR is a figure that represents the cost of a tariff for a typical consumer. It is intended to work in a similar way to the annual percentage rate (APR), for credit cards, for example. It assumes a medium level of energy usage, and includes the unit rates, standing charges and discounts that apply to a given tariff. It will also include the value of bundled products, where these are capable of being expressed in p/kWh or £/year. It can be used as a first point of comparison when comparing tariffs, as it will boil down the costs of a tariff into one p/kWh figure. If you see a TCR for an alternative tariff in any supplier marketing material, you should compare it to the TCR for your current tariff, which can be found on your bills, annual statements, price Increase notifications and other supplier communications. If the alternative TCR is lower, you should investigate further by obtaining a personalised comparison through a price comparison site or by calling the supplier in question.
Tariff Information Label (Label) - This represents the cost of a tariff for a typical consumer. Suppliers use it when advertising their tariffs – much like mortgage and credit card providers do with APR. It assumes a medium level of energy use, and includes the unit rates, standing charges and discounts that apply to a given tariff. It also includes the value of some extra products and services. You can use it as a starting point when comparing tariffs, as it combines the costs of a tariff into one simple pence per kWh figure. It isn’t personalised, so although it can be a quick way to check whether another tariff might be cheaper than your current one, you should follow up and get a personalised comparison through a supplier or price comparison website.
Tariff Structure - The way in which a tariff’s charges are structured. For example, some tariffs have a single unit rate whilst others have more than one unit rate (multi-rate).
Telesales - A method of direct marketing in which a salesperson solicits prospective customers to buy products or services over the phone.
Tera Watt Hour (TWH) - 1,000,000,000 kWh, 1,000,000 MWH, 1,000 GWH
Termination (exit) fees - Where part of their contract, these are the contractually agreed fees a customer must pay if they terminate their contract before the agreed contract end date.
The Office of Gas and Electricity Markets (OFGEM) - The non-customer facing industry regulator responsible for the competitive energy market, a non-ministerial government department reporting to DECC
Therm - The historic measure of gas consumption, equal to 100,000 BTU (British Thermal Units) and 29.3 kWh
Third Package - The term Third Package refers to a package of EU legislation on European electricity and gas markets that entered into force on the 3rd September 2009. The purpose of the Third Package is to further liberalise European energy markets. DECC is primarily responsible for its transposition in Britain and had to do this by the 3rd March 2011.
Third Party Intermediaries (TPI) - Third Party Intermediaries (TPIs) are companies that can offer advice and products to assist with a range of functions including energy procurement, efficiency and management. They can include switching websites, energy brokers and energy efficiency advice providers who interact with energy consumers. If you use a TPI as a business consumer, you may pay them directly or, more often, indirectly through your supplier. In the latter case your supplier may charge you a fee linked to your consumption, or a flat rate, which the supplier then transfers to the TPI.
Time of Use tariff (ToU) - A tariff where the charges vary by the time when the energy is consumed, for example through different unit rates for energy consumed during the day and during the night.
Top Line - The first 8 digits of the S Number displaying Profile Class, Meter Timeswitch Code and Line Loss Factor.
Tracker tariff - This is a tariff where the price per kWh for gas/electricity will vary in reference to other prices or indices. This can be the price of another tariff from another supplier, although we are proposing these tariffs will no longer be able to track the price of tariffs offered by suppliers, but only a published stock exchange quotation or index or a financial market rate over which the supplier has no control.
Transco - Part of National Grid, the company that owns the gas pipeline network of the UK
Transformer - An electric device, without moving parts, for transferring electric energy from one or more circuits to one or more other circuits by electromagnetic induction.
Transmission - The transfer of electricity at high voltage from power stations across the UK through wires on pylons to points where it can be distributed to users.
Transmission Losses - In transmitting electricity from generator to local REC area, some electricity is lost. Specific calculations have to be made by suppliers to determine the level of these losses.
Transmission Network - The wires and pylons that carry electricity from generators to the distribution networks. Owned and managed by National Grid.
Transmission Use of System (TNUoS) - Charges for a meter’s usage of the transmission network, varying by length & location representing 7% of the energy bill.
Transportation - The charges for and process by which gas and electricity is delivered from the generator to the meter point.
Transporter - The entity, primarily National Grid Transco, that transports gas from the producer to consumers.
Triad - The National Grid takes readings of maximum demands three times a year between November and February. The average of the three readings is used by the National Grid to determine transmission charges applied to the largest businesses.
U
UK Power exchange (UKPX) - A trading arena in which electricity can be bought or sold normally up to two days ahead of real time, often via the internet.
Unilateral Variation - An amendment to the terms and/or conditions (including price) of a consumer’s energy supply contract, which is provided for in the contract and is at the sole discretion of the supplier.
Unit - One kilowatt of power being used for one hour. It is the same as a 40-watt light bulb being left on for 25 hours. Also known as a ‘unit’ of energy.
Unit Rate - The monetary amount that is chargeable in respect of each unit of gas/electricity consumed.
Uplift allowance - The additional costs involved in supplying prepayment, Warm Home Discount and default tariff/standard variable customers compared to credit customers, inflated by the Consumer Price Index.
V
Variable - A tariff for which the supplier can amend the standing charge / unit rate(s) at its discretion.
Variation - An amendment to the terms and/or conditions (including price) of a consumer’s energy supply contract.
Vertical integration (VI) - The principle of a business owning more than one area of the energy chain: generation, transportation, metering and/or supply.
Volt - A volt is electrical pressure.
Voltage - The force that causes a current to move through some resistance, in this case, the National Grid. In industry terms, electricity moves round the main grid at a high voltage. When it is stepped down to the level of a smaller grid or an actual site it is regarded as low voltage. Low voltage supply is more expensive because of the costly process of stepping it down from high voltage. A number of larger industrial sites take high voltage direct which means they incur the cost of stepping the voltage down. For this, they subsequently receive more competitive pricing.
W
Warm Home Discount - The Warm Home Discount (WHD) is a government scheme aimed at tackling fuel poverty in Great Britain. Under the scheme, larger energy suppliers support people who are in fuel poverty or are at risk of it.
Watt - A watt is real power.
White label tariff - A tariff that is offered by a licensed energy supplier but uses the brand name of a non-licensed entity (excluding a brand name of the corporate group to which the licensed supplier belongs). The price and terms of the tariff may replicate those of the licensed supplier or may be modified to suit the specific needs of the brand. The legal relationship between the customer and the licensed energy supplier remain unchanged irrespective of the brand utilised for sales and marketing purposes.
Wholesale costs - How much a supplier has to pay to get gas and electricity to supply households with energy. You could be put on a default tariff if your fixed-term contract ends and you’ve not shopped around to choose a new one, or if you've moved into a property and not agreed a new tariff with the current supplier.
Wholesale Market - The energy market where suppliers, generators, traders and customers purchase electricity and gas via bilateral contracts or through energy exchanges.
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