Guide
Understanding Your Business Energy Bill
Every charge on a UK business energy bill, in plain English. No jargon, no assumptions about what kind of business you run.
Business energy bills are laid out for the supplier, not for you. Once you know what each line means you can tell in a couple of minutes whether the problem is your contract, your consumption, or your meter arrangement. Work down the list with your latest bill next to you. The terms are the same whether you run one shop or forty sites.
Unit rate (p/kWh)
The price you pay for every kilowatt hour you use, and the biggest single number on the bill. For most small business supplies it sits somewhere around 25 to 35p/kWh for electricity and 6 to 12p/kWh for gas. A rate well above that range usually means the contract has lapsed rather than that your site is unusual.
Tip: Put your current unit rate into the bill checker to see how it compares with what is on the market now.
Standing charge (p/day)
A fixed daily charge for being connected, whether you trade that day or not. Business standing charges commonly run from about 25p to 60p a day per meter, so roughly £90 to £220 a year on each supply. Larger supplies and sites with a lot of network capacity can be well above that.
Tip: Some tariffs trade a low standing charge for a higher unit rate. If you use a lot of energy the unit rate matters far more. If you have several small meters, the standing charges add up quickly.
Climate Change Levy (CCL)
A government tax on business energy, charged per kilowatt hour on top of your unit rate. It is a fixed published rate and it applies to almost every commercial supply. Charities and some very low usage sites are exempt or pay a reduced rate.
Tip: You cannot negotiate CCL away, but it is worth checking you are on the correct rate. Some energy intensive sites qualify for relief through a Climate Change Agreement.
VAT
Business energy is normally charged at the standard 20% rate. Supplies below a low usage threshold, and premises used mainly for charitable or residential purposes, can qualify for the reduced 5% rate.
Tip: If part of your premises is residential, such as a flat above the trading area or accommodation on site, ask your supplier about a mixed use VAT declaration.
Deemed and out of contract rates
When a fixed contract ends and nothing replaces it, your supplier moves you onto its default rate. Deemed and out of contract rates are the most expensive way to buy energy, commonly 40 to 60% above a negotiated tariff, and suppliers are not obliged to make the change obvious on the bill.
Tip: Check your contract end date today. If it has already passed, this is almost certainly the largest line you can move, and there is no exit fee to leave a deemed rate.
Capacity and maximum demand (kVA)
Larger supplies are sold with an agreed available capacity, measured in kilovolt amperes, and you pay a charge for it every month whether you use it or not. Exceed it and you pay an excess capacity penalty on top. Sites with big motors, compressors, ovens or chargers are the ones that see this.
Tip: Compare your agreed capacity with your actual peak demand over a year. Sites often carry capacity left over from equipment that was replaced or removed. Staggering start up also keeps the peak down.
Meter type: NHH, HH and AMR
A non half hourly (NHH) meter records a running total that is read periodically. A half hourly (HH) meter records consumption in 48 slots a day and is mandatory above roughly 100,000 kWh a year, and common on any site with a larger supply. Automated meter reading (AMR) sits in between, sending readings remotely on a smaller supply.
Tip: If you are half hourly, ask for your consumption data. It shows your overnight baseload and your true peak, and it is what makes a day and night or time of use tariff worth pricing.
Estimated versus actual readings
A bill marked E is estimated rather than measured. Estimates drift, and a long run of them ends in one large catch up bill or a credit that sits with the supplier rather than in your account.
Tip: Submit a reading on the same day each month, or fix the reason the meter cannot be read remotely. It costs nothing and it makes every other number on the bill trustworthy.
Multi-site billing
If you run more than one site you will usually have a separate meter, contract and end date for each. Sites drift apart over time, so it is common to find one branch on a competitive fixed rate and another sitting on a deemed rate nobody noticed.
Tip: List every MPAN and MPRN you hold with its end date. Aligning the sites onto one contract with one end date makes the whole portfolio easier to price and easier to renew.
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