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Understanding your business energy bills

Understanding your business energy bills

In any area of your business, you want to see correct invoices that reflect any goods or services you have ordered. While SavingSmart customers benefit from our FREE bill validation service to ensure that all your energy bills are accurate, we believe it’s helpful for our customers to understand their bills too.

Your energy bill is most likely to be emailed to you but you may still receive it by post for a fee.  You will probably receive a monthly bill and either pay monthly or quarterly, ideally by direct debit as some suppliers give a further discount for a reliable payment.

Meter profiles

The box with the S on the left and other numbers beside it explains the profile of your electricity meter. S stands for “supply.” Your home electricity bill will have 01 or 02 as the first number, showing that it’s a meter for domestic use. Your business electricity bill will have a different number, e.g. 00, 03 or 04 and previously 05-08. This long reference number is called the Meter Point Administration Number (MPAN) and is your unique electricity reference.  It is used to identify your electricity supply.

Gas supplies have a Meter Point Reference Number (MPRN) which identifies your gas supply.  The MPR is on your gas bill, not on the meter itself.  A Meter Serial Number (MSN) is a number given to identify the actual meter.  You will find a Meter Serial Number on each meter.  All these reference numbers are logged against a supply’s address on the National Database and must be kept up-to-date by your supplier.

Energy charges

The price per kilowatt hour (kWh) is how much you pay for the energy you’ve used, calculated from your meter readings.  Depending on your meter profile, there may be a day and night charge. There will be other charges on your bill such as a standing charge – these cover a supplier’s costs such as meter reading and maintenance and the cost of keeping you connected to the grid.

Your bill will identify if it is based on an estimated (E) or actual (A) meter reading. If it is based on estimated readings, it is likely to be over or under-charging you which may well become an issue over time.  Submitting regular meter readings is a good idea until your supply is either converted to a half-hourly supply which transmits meter readings to your supplier every half an hour or a smart (AMR) meter is installed.

P272 legislation

P272 legislation was introduced in 2015 to ensure great accuracy in business billing using advanced Automatic Meter Reading (AMR) meters.  If you have an AMR meter already installed, it will be converted into a fully compliant half hourly (HH) meter automatically.  These conversions should now be in place but many suppliers are struggling with a backlog of meters still to be changed over.

Under P272, all meters in categories 05-08 will convert to a half hourly meter, identified as 00 and take readings every half hour. These readings are then sent electronically to your energy supplier. This enables you, the business owner, to better understand when you use the most energy, meaning that you can plan ahead and use energy at the times when it may be cheaper. It also means that your bills accurately reflect the energy you use. Accuracy is very important as it means that you only pay for what you use, and don’t build up credit on your account.

Visual bill presentation

Suppliers present their bill information in different ways.  Your energy use may be broken down into a traffic light system, using red, amber and green colours. These refer to time bands, with red being the period of the day when electricity is the most costly, amber being the time when electricity is cheaper and green the period when it is cheapest of all.

Your half-hourly meter will tell you the times you are currently using the most electricity, so you can make adjustments to your working practices to ensure that this electricity is used at the cheapest time of day which will be determined by your energy tariff.

Most suppliers explain their bills on their website sometimes with a video presentation so it’s a good idea to take a look on-line if you’re not sure what your bill means.

What is CCL?

CCL is the climate change levy, a tax payable by all non-domestic energy customers. It was introduced by the UK government in 2001 to encourage businesses to reduce their energy consumption, and to provide funding for initiatives to fight climate change.

VAT

It is important to remember that VAT is charged at just 5% on your energy bill at home, but the full 20% is charged on your business energy bill. Your business can then claim back the VAT in the usual way.

Contract information and termination notice

Your bill should tell you when your contract is due to end.  In order to change supplier at renewal, termination notice is required to be submitted to your current supplier. When your contract is due for renewal, you have to decide if you want to enter into a new contract with your old supplier, or go elsewhere. Failure to submit notice of termination will result in you having no contract at all when your contract end date has passed and rolling onto very high emergency rates for your energy.

Issuing letters of termination at the right time is a service we offer at SavingSmart, but it is important to understand the termination process so you don’t end up out of pocket. You can read more about termination here.

Do you need help?

If you understand your business energy bill, you’re in the best position to make the right decisions about how you can run your business more efficiently. SavingSmart is here to help you – if your bills are still making your head spin, just leave it all to us! We’ll make sure you’re paying the right amount each time and that you’re on the right tariff for the amount of energy you use. We’ll even validate your bills for you and if they’re incorrect, we’ll liaise with your suppliers to amend them and re-bill you.  When we’re happy with them, they can then be paid.

If you want to save money on your business energy bills and take advantage of our service to save you the hassle, get in touch with SavingSmart today on 01483 600943 or 07909 523855 or contact us here.

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