Key terms and issues explained

Mae’r dudalen yma ar gael yn Gymraeg.

On this page you will find a range of key terms explained. Please click on a letter below to be taken to a list of terms and on "show" to read the explanation.

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.

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.

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

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.

Third Party Intermediaries: what your business needs to know

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.

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.

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