Select the most appropriate gas and electricity suppliers and you could be quids in. We show you how.
It has been billed as a revolution in the energy supply market. Late last month, the UK became the first country in the world to offer all its 26 million electricity and gas customers, commercial and residential, the opportunity to switch between a myriad different suppliers.

You can now have your gas energy needs met by a traditional electricity supplier and vice versa. Or you can opt for both to be supplied by one, or the other. In each case, the advantages of changing supplier are said to be substantial.

The National Audit Office estimates that, on average, customers who switched to a different gas supplier when that market deregulated last year, have saved pounds 78 a year on their gas bills. Estimates of what you may save by shopping around for your electricity needs are said to be pounds 35 to pounds 40 on a typical pounds 275 household bill.

What is more, gas or electricity will come through the same pipes, and be recorded on the same meters. All that happens is that your bills come from a different source and have a different letter heading.

So, all you need to do is find the right supplier. Easy. Unfortunately, things are not quite that simple. There are 27 different gas suppliers, many of which can supply every home in the UK. There are also at least 15 electricity suppliers, including British Gas, all of which are capable of supplying homes throughout the country.

To complicate matters further, many energy companies are promoting "dual fuel" bills, which give different quotes for both gas and electricity. They may be convenient but are not always the cheapest, according to Ofgas, the gas regulators.

How is it possible to pick the best deal? First, all companies operate different pricing according to how you pay your bills. If you pay by card, cheque or standard credit means, you pay the most (other than by pre-payment vouchers or keys). Savings are available by paying by direct debit. These increase when direct debits are taken out of your account on a monthly basis.

There are two elements to a gas bill. The standing charge and the consumption rate, based on a standard measurement known as kilowatt hours (kWh). Assess whether you would be better off with a different supplier by adding together your last four quarters' bills. This will tell you how many kWh you are using. Use the table on this page to tell you how much you pay per kWh, measured in pence. Multiply the number of kWh used by the price of your current supplier, as per your payment method. Divide the figure by 100 to give the annual bill in pounds. Then there is the standing charge. On this table, it is an annual amount. Add this to the total bill and you have an idea of what you are paying today. By comparing it with other suppliers, you can work out whether it is cheaper to switch. Remember that not all suppliers are authorised to provide gas in your area.

As for electricity, it is also priced in kWh. Again, payment methods make a difference to your bill. There is further confusion because there are separate Economy 7 tariffs for mainly night-time usage, particularly for storage heaters and washing machines. As an example, London tariffs only are used here.

Add the total number of kWh hours, multiply them by the prices in this table, add the standing charge and you can work out your annual bill and what it would cost by switching to another supplier. Any savings (or paying more) are not comparable with all other regions outside London - but it is possible to obtain similar tables for every region from either Offer, the electricity regulator, or Ofgas.

What of so-called "dual fuel" offers, where one supplier delivers both gas and electricity to your home? Despite heavy promotion from both gas and electricity companies, dual fuel may not always offer the best deal.

You will sometimes be offered a discount if you take them from one supplier. For example, British Gas claims it can deliver a saving of around pounds 14 a year. It guarantees to supply cheaper electricity than any local electricity competitor until 2001, an average annual saving of 11 per cent (including both kWh and a standing charge).

However, British Gas makes no promises concerning its own gas supply. In fact, many electricity companies will undercut it. In discussions with potential customers, its staff are prone to telling them that they are unable to cut their own gas prices because of regulatory pressures. Bear in mind, though, that the same applies in reverse. While most electricity suppliers will undercut British Gas when it comes to gas supply, they will cost more when it comes to their own power supply.

Is there a way of working out roughly who you would be better with and whether dual fuel makes sense? There is.

By calculating, separately, how much your gas and electricity usage is and how much it would cost with each supplier, you can work out what the total cost is. For example, if you are a heavy gas but a light electricity user, switch to an electricity supplier for gas or both of your fuels - and vice versa.

Broadly speaking, if your usage of each type of energy is similar in cost terms, the saving between dual fuel usage with one or other supplier will be marginal. At that point, it may make more sense to consider either the cheapest of each - or to go back to other issues which are not always considered, such as quality of service and other terms, such as the contract length.

Also, you can cancel one fuel source with a dual supplier. But this means that the terms of supply for the other fuel can change - and become more expensive.

Offer: 0800 451451

Ofgas: 0800 887777

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