What Is The Tariff Comparison Rate?

Ofgem have introduced a Tariff Comparison Rate (TCR) as part of their Retail Market Review.

The TCR is a single unit price rate – there's one for each tariff on the market – that people can use as a guide to compare tariffs. It's probably best described as similar to the annual percentage rate (APR) the financial industry uses.

Customers and the wider public can request a TCR from us at any time from 31 March 2014 and from then on all suppliers' bills and annual statements will contain a TCR that takes into account the tariff price, tie-ins, discounts, exemptions and bundled products.

Based on 'average' not 'actual' consumption

The tariff comparison rate sets out the unit price (as pence per kWh) with a typical annual electricity consumption of 3,100 kWh or a typical annual gas consumption of 12,500 as defined by Ofgem.

But obviously the amount people will pay for their energy depends on how much they use. For this reason it's important to remember the TCR is intended to help you compare energy suppliers on a like for like basis – it's just a guide and won't give you a specific price. And it doesn't take fuel mix (how green your energy supply is) – or the quality of a supplier's customer service rating. 

How the TCR is calculated 

Single fuel – Green Electricity, Green Electricity + Car and Green Gas

  1. Multiply our unit rate by Ofgem's average consumption figures – 3,100 kWh for electricity and 12,500 kWh for gas
  2. Add a year's standing charge
  3. Add VAT
  4. Divide this figure by 3,100 to give us pence per kWh

Dual fuel - Green Electricity or Green Electricity + Car plus Green Gas

  1. Multiply our unit rate by Ofgem’s average consumption figures – 3,100 kWh for electricity and 12,500 kWh for gas
  2. Add a year’s standing charge
  3. Subtract the annual dual fuel discount from your gas tariff if you’re a dual fuel customer
  4. Add VAT
  5. Divide this figure by Ofgem’s average consumption figure, to give us pence per kWh

Other things to consider

Our tariffs are made up of a daily standing charge – that pays for the wires, distribution, metering, energy infrastructure etc – and a unit price for every unit of energy used. Very low users will still pay a standing charge so they may find their cost per unit becomes higher than the 'average use' used in the TCR calculation. 

The British Gas TCR for Dual Fuel

Although British Gas and Ecotricity both have an annual discount of £15 for dual fuel customers, the way we apply it is slightly different. British Gas apply a £7.50 discount to both fuels; and we apply the full £15 discount to the applicable gas account. 

Due to the way the TCR is calculated, and to ensure that we are comparing ‘like for like’ – the TCR we show in our Price Checker for British Gas when you request a dual fuel comparison, is calculated on our basis (£15 off the gas account). So, you won’t find the exact same figure on their website. If we used their figure, we think it would make the comparison misleading. 

In reality, the difference is tiny and it means that our price checker will show a slightly lower TCR for British Gas than they do themselves. 

In all other cases, we use the exact TCR values published by our competitors in our Price Checker.