Strange words, big nasty pound signs and horrible looking layouts! For many businesses the dread of opening a new business energy invoice is real, and for good reason. The overwhelm can often lead to businesses hiding behind the curtains! Whilst this may offer some temporary relief, the reality is the problem only gets bigger and more scary!
Properly understanding your energy bill is the first step to overcoming your fear, so let’s break all those petrifying words and phrases down…
The top three most important things on your business energy bill are:
Contract End Date
Your contract end date is when the current fixed price period draws to an end. After this, your energy supplier will either move you on to an out of contract rate or push you into an automatic renewal contract, typically with very high rates. Failure to organise a renewal contract before you reach your contract end date could be a costly mistake for your business!
This is a rate you pay every day for an energy supplier to provide energy for your business – which is charged regardless of how much actual energy you use. Typically this is charged in pence or pounds per day, and can vary depending on the size and type of your meter or supply.
Your unit rate is the amount you pay for each kilowatt hour of electricity or gas you use. Depending on your meter type, you may have multiple unit rates, with each one charging for a different period of time, such as a day and night rate. It is super important that you make sure this rate is competitive, otherwise your costs could spiral out of control.
Some other elements you will need to consider on your business energy bill:
Unless your business is exempt, it is highly likely that your business will be charged VAT at 20%. Some businesses using a low volume of energy only have to pay 5%, for example, If your business electricity usage is below the average 33kWh per day or 1,000 kWh per month, you will be eligible for a lower rate of VAT on electricity bills. Feel free to contact us if you need to check which VAT rate you should be paying.
Climate Change Levy
Climate Change Levy or CCL is a tax on energy delivered to non-domestic users in the United Kingdom. Its aim is to provide an incentive to increase energy efficiency and to reduce carbon emissions. Some businesses can be exempt from paying this but most have to pay it in line with their energy consumption. The charge is often seen as a separate line on your bill.
Depending on your meter type, you may have to pay metering charges. This tends to be found on large business energy bills where there is half hourly metering in place.
What you won’t see on your business energy bill.
Some charges that you do not see on your business energy bill but you should be aware of.
The wholesale markets for electricity and gas can change rapidly, pricing is in constant fluctuation, responding to a whole host of economic and geopolitical factors. Unless you are on a fully fixed and fully inclusive contract, changes to the wholesale price may impact upon your unit rates regardless of if you are in a fixed term contract or not.
Transmission & Distribution
The cost of transporting, distributing and balancing your electricity from its source to its destination varies depending on the area. These charges can vary from time to time, and may impact upon your unit rate if your energy contract is not fully fixed.
Other Industry Charges
Included within your unit rates are a whole host of other industry charges that are being added to and changed all the time. A fully fixed contract is the only way to make sure any changes and increases do not end up increasing your costs!
This is the cost for the supplier to deliver their services to you. This is built into your unit rates or standing charge.
Gas and electricity are commodities and so business energy bills can fluctuate because of the volatile energy markets. Keeping an eye on things such as world events, the electricity market reform policy and electricity generation is a good idea if you want to minimise your costs.
What else could you see on your business energy bill
Each supplier provides different layouts and terminologies on their bills, however here is a list of the most common items that appear on business energy bills. Again, feel free to reach out to us if you need any help;
- Invoice type, time period and credit notes
- Total amount: How much you owe for your business energy.
- Consumption graph: A snapshot of your business energy usage.
- MPAN and MRPN: Meter Point Administration Number (MPAN) number for electricity, Meter Point Reference Number (MPRN) number for gas. These are unique reference numbers that identify the meter(s) at your site(s).
- Type of meter reading: This tells you if your bill is based on an estimate or an actual meter reading.
- Meter readings: The list of readings received from your site.
- Meter serial number: The unique number for the meter that supplies your site.
- Account number: Your unique number to identify you within the supplier’s system.
- Bill breakdown: The charges you are being billed for.
- Contract details; Where you can find your contract end date
How can Outsourced Utilities help you?
Our friendly team of trusted consultants are on hand to help you make sense of business energy. Our aim is to help you take back control of your energy bill. Our managed service solution and online energy management system means you can get on with your business whilst we take care of your energy, with the ultimate goal of saving your business both time and money!
Please call us today on 01244 506666 or fill in the form below if you would like some free help with your business energy bills…