Understanding Your Business Energy Bills

You’ll likely be familiar with domestic energy bills. However, don’t be fooled –both cover the consumption of gas and electricity, but business energy bills are very different.

The biggest differences are the inclusion of the Climate Change Levy (CCL), which you wouldn’t pay on a domestic energy bill, the amount charged in VAT (value added tax), unit price costs and standing charges.

Wholesale costs

For commercial contracts, suppliers buy the energy needed to supply businesses in bulk. This is known as a wholesale cost. It can be affected by many outside factors – natural disasters, conflicts, local, regional and global politics, etc.

Although it’s never marked in a breakdown of the costs on your business gas or electricity bill, the wholesale cost will be reflected in the unit rate.

If you’ve opted for a fixed rate contract, your unit rate will remain the same for the duration. However, if you’re on a variable contract, you’ll likely see it rise and fall with wholesale prices.

Transmission Network Use of System (TNUoS)

TNUoS charges are typically built into your bill. They cover costs incurred by your energy supplier in transporting gas and electricity from the wholesale market to your business, as well as maintaining and upgrading the National Grid.

Your business will pay a flat rate – not that it’s ever highlighted in your bill. However, if you’re based in a remote location, you may pay more – due to the additional challenges of getting energy to these areas.

Distribution Use of System (DUoS)

DUoS charges are applied by regional bodies, known as Distribution Network Operators (DNO). They’re responsible for transporting your supply direct to your businesses’ premises.

Your contract, prime consumption times and maximum supply capacity will impact how much your DUoS costs are. Like TNUoS, DUoS charges aren’t featured in a breakdown of costs in your bill but will impact your unit rate.

Your business electricity bill

It should include:

• Your account number – the code used to identify your business when dealing with your supplier.
• Your VAT number – be sure this is correct; if it’s wrong, you could end up over or underpaying.
• Billing period / date – the period / dates the invoice spans, or when it was generated.
• Your contract information – here, you’ll find an outline of the name of the plan you’re on, the renewal date and supplier contact info – should you wish to discuss your contract.
• Your meter point administration number (MPAN) – the 21-digit number used to identify your business’s property. Find out more in our guide on MPAN and MPRN numbers.
• Your meter’s serial number – a combination of numbers used to identify your meter. It should be the same as the number near the barcode on your meter.
• Type of readings – depending on the information your supplier has, you’ll either have a bill based on:
o Estimated readings – if you haven’t provided your supplier with meter readings, they’ll estimate how much electricity you’ve consumed.
o Actual readings – if you have provided your supplier with meter readings, they’ll be shown as actual or customer-supplied.
• Your billing period balance – you’ll see a breakdown for the period consisting of the elements that make up your bill. These are:
o Unit rate – the amount you’ll pay for each kilowatt-hour (kWh) of electricity you use.
o Standing charge – a fixed daily levy charged on your electricity supply.
• Total amount owed and payment date – you’ll see the latest amount you owe on your business electricity bill, as well as the date your payment is due.
• VAT charges – you’ll likely be charged at the regular 20% rate – unless your business qualifies for the reduced rate of 5%.
• Climate Change Levy (CCL) – a tax charged on overall energy consumption designed to encourage businesses to become more energy efficient.

Your Business Gas Bill

Similarly, it should include:

• Your account number – the code used to identify your business when you’re dealing with your supplier.
• Your VAT number – be sure this is correct; if it’s wrong, you could end up over or underpaying.
• Billing date / period – the date the invoice was generated or the billing period it covers.
• Your meter point reference number (MPRN) – it’s your unique 10-digit number give to your gas connection and meter. If you decide to switch, you’ll likely be asked for this. Find out more in our guide on MPRN and MPAN numbers.
• Your meter’s serial number – it’s a combination of numbers used to identify your meter. It should be the same as the number near the barcode on your meter.
• Type of readings – depending on the information your supplier has, you’ll either have a bill based on:
o Estimated readings – if you haven’t provided your supplier with meter readings, they’ll estimate how much gas you’ve consumed.
o Actual readings – if you have provided your supplier with meter readings, they’ll be shown as actual or customer-supplied.
• Your billing period balance – you’ll see a breakdown for the period consisting of the elements that make up your bill. These are:
o Unit rate – the amount you’ll pay for each kilowatt-hour (kWh) of gas you use.
o Standing charge – a fixed daily levy charged for maintaining your electricity supply.
• Total amount owed and payment date – you’ll see the latest amount you owe on your business gas bill, as well as the date your payment is due.
• VAT – you’ll likely be charged at the regular 20% rate – unless your business qualifies for the reduced rate of 5%.
• Climate Change Levy (CCL) – a tax charged on overall energy consumption designed to encourage businesses to become more energy efficient.

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