Business energy bills are often very detailed, and they can be difficult to fully understand – but they don’t have to be! Here’s our quick guide to interpreting your energy bills:
Domestic vs business energy bills
While there is no difference between the power that runs through your plug sockets at home and the power that turns on your computer at work, differences can be found in the pricing structure and contract details for domestic and non-domestic premises – and in the way your business is billed.
All energy bills include many separate charges, particularly for electricity. These typically include;
- Wholesale Energy Costs – This is the cost of producing electricity in power stations
- Network Charges – Costs incurred to ensure that the transmission and distribution network is maintained and operated within prescribed limits + losses in these networks
- Renewables Levies – These charges are used to pay subsidies to operators of renewable energy plants
- Carbon taxes – these effect the wholesale energy cost, but are also billed separately as the climate change levy
- Fixed Charges, Admin & Profit – These cover costs for connecting to the distribution network and for maintaining meters and admin charges associated with Ofgem and Elexon as well as your licensed supplier
- VAT – 5% for domestic customers but 20% for businesses
Domestic customers often see just a fixed cost per kilo-watt hour on their bills. However, business customers will usually see a more detailed breakdown of charges, though different suppliers may show this in different ways.
Breaking down your bill
No two invoices are the same and each energy supplier is likely to have a different layout and may use different terminology on the bills they issue to you. Regardless of who your energy supplier is, here’s a quick overview of some of the items which most commonly appear on business electricity and gas bills:
Invoice type and period: This shows whether your bill is for gas or electricity and the period for which you are being billed.
Total amount: The total amount of money, if any, that you owe your energy supplier.
Consumption graph: Most energy bills will include a visual snapshot of your energy usage, which is calculated in kilowatt hours (kWh).
MPAN and MRPN: Your energy bill will show your Meter Point Administration Number (MPAN) number for electricity, and your Meter Point Reference Number (MPRN) number for gas. These unique reference numbers identify the meter(s) at your site(s). These numbers will speed up the process whenever you contact your supplier or if you ever wish to switch suppliers.
Type of read: This tells you whether your bill is based on an estimate or an actual read. You can ensure your business bills are accurate by submitting regular meter readings to your supplier.
Readings: This lists the meter readings received from your site(s). Your readings will either be actual or estimated depending on when you last submitted a meter reading.
Bill breakdown: This section is usually at the bottom of your energy bill and breaks down all of the charges you are being billed for.
Supply number: This is a unique number and is used to identify you within the electricity or gas system. This is not the same as your meter number, which appears on your meter.
Contract details: In this section you can find your contract end date.
Meter serial number: This is the serial number for the meter that supplies your site(s)– it will match the number on your meter.
Shopping around
The cost of electricity is rising, and many companies are paying more than they should be for their business electricity. Whether you use electricity to light your site, run air conditioning or power your machinery; high electricity overheads can seriously affect your business’ bottom line.
Don’t fall victim to the automatic renewal! Just like you would with your car or house insurance, get your energy contract renewal date in the diary and take the time to shop around for the best tariff. Something so simple as saving your energy contract renewal date in your calendar could save you money on your energy bill – and why pay more when you don’t have to? Shopping for a better energy deal and switching tariff or energy supplier can make a big difference to your bills – around £300 a year.
How can Inenco help?
We have built strong relationships with a number of suppliers, enabling us to negotiate on your behalf and get the most competitive energy rates and leaving you free to focus on your day-to-day business activities. We work for your business and not the supplier, and our specialist team work towards helping you to manage and reduce your energy costs through our expertise and knowledge of the energy market.
Inenco are a completely independent energy consultancy, and we help thousands of companies to purchase their commercial energy. Our expert team can help you mitigate upcoming energy price rises by comparing business electricity prices and ensuring that you’re on the best energy deal for your organisation.
If you’d like to speak to one of our helpful and friendly advisers about your business’ energy bills and management call us on 0800 408 1499 or send us an email.
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