Operating costs make up 14% of an electricity bill and 15% of a gas bill.
There are three components to these costs:
- The Core operating costs cover the operational cost of serving customers who are on a Direct Debit contract (the majority of the customer base). These costs include metering, billing, customer service and the like.
- Payment Method Adjustment Allowances cover the administrative costs related to serving customers on other payment methods, namely standard credit and prepayment metres.
- The Smart Meter Net Cost Change funds the nationwide rollout of smart metres.
Operating costs component of annual gas and electricity bill
Image Description
Column chart breaking down operating costs in energy bills. Electricity operating costs (£122) include £95 for core operating costs, £18 for smart meter net cost change, and £8 for payment method adjustments. Gas operating costs (£125) follow a similar breakdown.
