Understanding your business energy bills can give you the knowledge to reduce your business energy spend.
The benefits of understanding your business energy invoices is vital if you want to be able to check your business is being charged correctly for the energy its using, as well as being able to identify potential savings.
- Energy bills differ from one energy supplier to the next but usual contain the following information:
- Supplier name – The company who supplies your energy
- Bill period – The dates you are being billed for
- Night consumption – The amount of energy consumed during the “night period”
- Day consumption – The amount of energy consumed during the “day period”
- Total energy consumed – The total amount of energy used during the bill period
- Unit rate – the price per unit of energy used.
- Standing charges – the monthly charge
- Available capacity charge – based on expected site usage, this charge is paid to ensure enough energy is made available to you.
- Reactive power charge – larger users only, depends on type of usage
- Climate Change Levy charge – a tax on usage
Business energy invoices should be checked as soon as they are available so if there are any anomalies, you can let your supplier know immediately.
Here is a list of things to check:
Create an Energy System
- Review BOTH the fiscal and usage information on your business energy bill.
- Keep on-going records at a bill level as a minimum.
Energy Bill Tariff Rates
- Always use energy procurement specialists when buying larger quantities of energy.
- Tariffs have been simplified of late by Ofgem directives, so businesses should shop around for the best unit rates. Always look at the whole package as low unit rates might be negated by high standing charges.
- Take into account the night rate as well as the day rate. Check you are being charged your agreed rate and ensure you don’t fall into default rates which can be exceptionally higher than your agreed rates.
- Beware of contractual obligations, such as some suppliers have 3-month cancellation clauses.
Understand Energy Bill Consumption Figures
NEVER allow energy suppliers to bill you on estimated usages. Always check the energy bill consumption (kWh) quantities are ACTUAL ones. You can avoid estimated energy bills by regularly taking manual meter reads and submit it to your energy supplier.
Taking monthly meter reads is a great way of recording consumption. Deducting one meter read from another, will enable you to calculate the energy consumption. Alternatively, Automated Meter Reading (AMR) could be installed which will give you fuss free, accurate consumption figures.
Larger energy users will have meters that produce half-hourly data; obtain and use that information for energy management purposes – this may require guidance from an external resource.
Energy Bill Payments
If paying by Direct Debit, ensure that you review the account balance regularly to neither over or under pay.
Energy suppliers will not release registration of a supply if there is any debt; if you intend to change supplier, you MUST settle the outgoing supplier in full as quickly as possible or you will encounter deemed/default rates.
If you prefer, you can use and energy consultancy company like Efficiency Direct to carry out your bill verification for you. They will check that you are being charged correctly for the energy that you use and can assist with energy procurement to ensure you get the best energy rates.
