Large legacy suppliers: Domestic dual fuel bill breakdown over time

Domestic dual fuel bill breakdown over time: At-a-glance summary

Between 2009 and 2019, the average domestic dual fuel bill has fluctuated, reaching a peak of £1,286 in 2013. In 2019 it decreased to £1,171 from £1,184 in 2018. Both average wholesale and environmental/social costs reported by the large legacy suppliers increased in 2019, while other costs remained fairly unchanged. Given the continued competitive pressure and the introduction of the default price cap in 2019, suppliers could not pass through these cost increases to customers and, on average, experienced a loss (the EBIT component was down to -£16 in 2019 from £33 in 2018).

Relevance and further information

This indicator helps to explain the costs making up an average dual fuel bill and show the factors influencing total bills in a given year. The costs that make up a bill are wholesale costs, network costs, environmental and social obligation costs, operating costs (including depreciation and amortisation), supplier pre-tax margin and VAT.

Methodology

To estimate the breakdown of an average gas and electricity bill, we took the sum of each category of costs and pre-tax supply margins as reported by the suppliers for each fuel and then divided by the total number of customers for that fuel. We then added VAT at 5% and summed the implied bill components for gas and electricity together to derive an estimate of the overall costs making up a dual fuel bill.

Note that because it is based on the total costs and customer numbers reported by suppliers irrespective of their tariff type, the bill breakdown for gas will reflect a mixture of the costs of serving gas to dual fuel and single fuel customers – and the same also applies to electricity. As such, the dual fuel breakdown should be considered an approximation in that it will reflect a combination of the costs incurred in serving gas and electricity to both dual fuel and single fuel customers (which may differ if, for example, electricity-only customers consume more electricity than those customers that are also supplied with gas).

The data presented is based on the latest available Consolidated Segmental Statements. It may differ from the data that can be found in the supplier’s externally published Consolidated Segmental Statements. This is because we have made some adjustments to the way in which exceptional items are reported among suppliers to improve comparability.

Figures relate to the suppliers’ financial years. Five of the companies (British Gas, EDF, E.ON, npower and ScottishPower) have financial years ending in December, whereas SSE’s financial year runs from April to March.