What is the difference between an estimated bill and an actual reading?

If you keep an eye on your electricity and gas prices, you might already be aware your suppliers do not employ the same methods month in and month out to track your usage.

Instead, many suppliers will do an actual reading followed by an estimate, terms that can be confusing and may lead to a variation in the amount you will see on your bills.

What is an estimate?

An estimated bill is when your gas or electricity supplier predicts the amount of power you would have used that month based on your usage from the previous year.

Why does my energy supplier need to do an estimate?

It can be costly for suppliers to send an agent to your premises every month to do a reading of your bill.

In some cases, it can be difficult to reach your meter. If you have unrestrained dogs, the agent may not be able to access it due to occupational health and safety risks.

Similarly if your meter is located inside your house, the agent will not be able to take a reading unless you are at home.

This means you will receive an estimated reading.

How can I tell if my bill has been estimated?

Both your gas and electricity bulls will have the word 'estimated' or an 'E' beside the meter readings to indicate to you how exactly you bill has been calculated.

What happens if my estimate is too high?

There might be fluctuations on your bill from month to month. Estimated bills are based on the amount you used in the previous year as it can then be seasonally adjusted.

However, even if this is too high one month, the bill you receive the following month will be lower to balance the higher cost.

Similarly, if you are undercharged you will have to make up the difference when you receive an actual reading.

How often should I have an actual reading?

It is required under the Energy Retail Code that an actual reading be taken at least once every 12 months.

This Code also requires that old-style meters must be read at least every three months for electricity and gas meters at least once every two.

What about smartmeters?

Smartmeters eliminate the need for estimated bills as they are able to send information about your usage and data to your energy retailer.

These digital meters replace the old style meters and mean there is no need for an agent to visit your property.

If you are due to have one installed, you may notice your bills are higher. This is because every month you will receive an actual read rather than an estimate reading.

Posted by Tim Wolfenden.