Three Tips For Cheaper Utility Bills

There are lots of gas and electricity tariffs out there, but if you arm yourself with information, it becomes pretty easy to find the best deal for you.

In Are Gas And Electricity Comparisons Accurate? I wrote about my interview with senior people at Xelector, which runs our utilities comparison tool. They explained to me how online gas and electricity comparison works. Reassuringly, they showed me that comparing utility prices online actually does work.

One of the many things I didn't have space to mention then was that there are thousands of tariffs, which seems unnecessary. Florian Ritzmann of Xelector believes it's largely to confuse people. So no change there then. Sigh.

But as I showed, it's easy to sort through tariffs online and, armed with information, it's really not all that difficult to make decent savings. With this in mind, here's some more information.

1. Buy gas and electricity separately

Sometimes there are savings to be made from buying gas and electricity separately. This echoes financial products, where, even taking into account joint discounts, it is almost always cheaper to buy separately from different providers (e.g. don't buy home insurance through your mortgage company). However, the difference here is that many providers aren't interested in selling gas by itself. This means that there is less competition, which means there's less pressure to reduce prices.

Even so, tariffs fluctuate a great deal. The price changes you read about in the papers are just for existing customers, but tariffs for new customers are being tinkered with regularly. From one month to the next it may flicker from being cheaper to buy both together and then separately, and back again. Therefore, the key is to compare gas and electricity prices together and separately.

2. Tariffs that are guaranteed to fall

At present, fixed- and capped-rate tariffs are not a good idea (as I wrote here). However, with prices likely to come down, it may be worth considering 'reverse-capped rates' in the future. These are tariffs that are fixed for a period of time and then guaranteed to fall over a specified period.

It's not quite yet the right time though, according to Ritzmann. Right now British Gas is the only provider that has such a tariff, which they call 'Fix and Fall'. Its prices are fixed at the company's standard rates for more than a year, until December 2007, and then the price comes down 4.5%. Problem is, although this decrease is guaranteed, it's very late and very little considering that prices are expected to come down by perhaps 20% some time next year.

But if better reverse-capped tariffs show up they may be worth considering, especially if you're on a tight budget, and Ritzmann thinks this may happen next year. He also said that the mere fact that everyone thinks prices are coming down could force prices down!

3. Use the most accurate utilities-comparison tool on the Web

Xelector is proud of its 'variable tariff search', which is available through The Fool. It's more accurate than any other utilities comparison you can get, because you enter the precise details of your tariff, i.e. the pence per kWh. Apparently, no other utilities comparison does anything like it.

This search is particularly useful if you're on a non-standard tariff, such as a capped- or fixed-rate, because it's the only way to estimate how much gas and electricity you are using with any accuracy. Most importantly, it helps you sort between all the tariffs that are launched to confuse you! Ritzmann said that the watchdog, Energywatch, indicated that they liked it a lot in a recent meeting.

The tariffs that this search is particularly useful for include:

• British Gas Click Energy, Discounted Electricity, Fix and Fall, Price Protection 2007, Price Protection April 2009, Price Protection December 2009, Price Protection 2010, Regional Discounted Electricity.
  
  
• EDF Energy Capped Tariff, Green Tariff and Energy Online.
  
  
• Green Energy UK 100.
  
  
• npower Gas Guardian (juice customers should select npower and use the standard search facility) and Sign Online (if signed up before October 2006).
  
  
• Powergen Capped, Energy Extra, EnergyOnline (if signed up before April 2006), Gas Guarantee or Green tariffs.
  
  
• Scottish Hydro/Southern/Swalec RSPB or Airmiles tariffs.
  
  
• ScottishPower Capped Price, Green Plan or Online Saver (H20 customers should select ScottishPower and use the standard search facility).
  
  
• Telecom Plus Low User or High User tariffs.

So if you're on one of these, check out the variable tariff search! To get to it, you enter your basic details from here as normal, then click 'Get Your Quote', and you'll see a 'Variable Tariff Search' button at the bottom of the page. You can get all the extra information you need from your bill.

Compare utilities prices now through The Fool.