How to read and understand your gas and electricity bill

There are 3 main parts to your gas and electricity bills: the price of the energy, distribution and transmission costs, and taxes and surcharges. Learn how to identify them so you can better understand your bill, and thus better control it.

Understanding your gas or electricity bill isn’t necessarily easy. The rate you pay is divided into several parts. How this works isn’t always clear to the uninitiated. And yet it is easier than you think when you take a closer look.

How is a gas or electricity bill composed?

There are three main parts to your bill:

• the cost of the energy itself
• the distribution and transmission costs of your gas or electricity
• and the taxes and surcharges related to your energy supply

The price of gas and/or electricity is determined by your energy supplier and differs from one provider to another. Their distribution and transmission costs, and taxes and surcharges, vary according to the area you live in. In addition, they are respectively determined by the distribution network operator (DNO) and transmission system operator (TSO), and the government.

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Understanding your energy bill: gas and electricity prices

The “energy price” part (gas or electricity) is calculated on the basis of your consumption. Depending on the price per kilowatt-hour (kWh) set by your supplier, you will therefore pay an amount that is determined by the quantity of energy you consume.

This price per kilowatt-hour is defined by your type of meter:

• Standard meter: the energy price remains the same from Monday to Sunday, regardless of the time of day;
• Variable-rate meter:
  1. The “peak hour” rate applies if you consume energy during the day. The energy price will therefore be higher.
  2. The “off-peak” rate applies if you consume energy at night. The energy price will therefore be slightly lower. Please note that the switchover time differs depending on the municipality and the DNO.
• Night meter only: this rate applies to the energy consumption of appliances that operate only at night (electric storage heaters, storage tank water heaters, etc.).

In addition, you will also have to pay:

• a green energy cost (enabling suppliers to meet renewable energy requirements)
• and a fixed fee (both included in the “Energy” part of your bill)

This is a specific feature of the Belgian energy market.

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Did you know?

• If you have taken out a fixed-price contract, your energy tariff will remain unchanged for the duration of the contract;
• On the other hand, if you have taken out a variable-price contract, your energy tariff will vary according to fluctuations on the Belgian and European energy market. Price indexation will take place quarterly or monthly.

>> Also read: Fixed price or variable price? Which one should I choose?

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Understanding your energy bill: transmission and distribution prices

The transport and distribution costs are

Energy transport and distribution prices are respectively determined by your distribution system operator (DSO) and your transport system operator (TSO) . They allow them to support the costs of the infrastructure that transports gas and/or electricity from the high, medium and low voltage (electricity) network and the high, medium and low pressure (gas) network to your home.

• The price of transmission varies from one home to another in Wallonia depending on ease of access. In Wallonia, the cost of energy transmission has been pooled since 2019 to make it cheaper. By 2024, it will be same for everyone.
• The distribution price covers the cost of bringing energy from the medium and low pressure (gas) or medium and low voltage (electricity) network to your home. This price differs according to the area of activity in which you are located (and hence the DNO to which you belong).

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Find out what the electricity and natural gas distribution costs are according to your DNO on the CWaPE website. The CWaPE is the body that controls and approves these rates.

Understanding your energy bill: taxes and surcharges (public charges)

The surcharges and taxes (federal and regional) are set by the public authorities and billed by the suppliers who pay these amounts in full to the entities concerned (government and Regions).

What taxes and fees appear on my electricity bill?

• Energy levy: allocated to the social security fund;
• Federal levy, which:
  1. Covers CREG’s operating costs;
  2. Finances nuclear power phase-out and the federal policy aimed at reducing greenhouse gases;
  3. Finances the CPAS’ energy fund (in terms of supplying energy to the most deprived persons) and the costs related to the application of the social tariff;
  4. The fee for connection to the electricity grid: it is used to finance the CWaPE, actions to protect the environment, the promotion of renewable energies and social guidance on energy provided by the CPAS (only in Wallonia).

What taxes and fees or surcharges appear on my gas bill?

Energy levy and federal levy (except nuclear power phase-out and greenhouse gas reduction);
The fee for connection to the gas network (only in Wallonia).

Did you know? A VAT rate of 21% applies to gas and electricity, except for the federal levy and the connection fee (in addition to the protected customer surcharge as regards gas).

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Find out the applicable taxes and fees for gas and electricity in Wallonia on the CWaPE website.

Conclusion

As you can see, the energy part only represents a third of your bill at best, and only one fifth at worst. It isn’t much, but it is the only part over which you have complete control. As far as taxes and network costs are concerned, you have very little influence on their amount.

What does this mean for you in practical terms? That it is in your best interest to lower the energy part of your bill as much as possible. You can reduce your electricity or gas consumption by tracking down energy losses. Also think about replacing your old energy-consuming domestic appliances.

Finally, another effective solution is to compare your electricity and gas rates. If it has been more than a year since you changed your energy contract, we advise you to make another comparison. This way you can check that you always benefit from the best prices. If this isn’t the case, don’t hesitate to change your contract in order to make valuable savings! If you aren’t sure how best to proceed, you can call us free of charge on (0800 37 369) so that one of our energy advisors can assist you.

Sources:

• Energy price breakdown (Creg.be)
• Electricity and natural gas distribution rates 2018 (CWaPE.be)

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