How to understand your business’s energy bill
Understanding your business’s energy bill is key to realising whether or not you’re paying too much for your gas and electricity.
The reason for this is that your bill contains all the information which explains the contract you’re currently on, the prices you’re being charged and the other factors that contribute to the cost of your energy.
Here we’ll explain the different things you’ll see on your business’s bill and how to tell if you could be getting a cheaper deal elsewhere.
Standing charges and unit rates
These two costs are the most important when it comes to understanding if you’re paying over the odds for your energy, and they can vary significantly depending on your deal.
The standing charge is a fee you pay every day irrespective of whether or not you use any power, while the unit rate is a cost you pay for each unit of energy you use. This is measured in kilowatt hours (kWh).
Almost all electricity bills will include a standing charge, although some business gas contracts may not – it depends what you’ve signed up to with your supplier.
The lowest standing charges are around 35 pence per day for gas and 30 pence per day for electricity. For unit costs, the cheapest are currently around 4.5 pence per kWh for gas and 11 pence per kWh for electricity. If you’re paying more than this, there’s every chance you could lower your bills by switching to a better deal.
Contract end dates and notice period end dates
Printing these two dates on a business’s energy bill is a new development, and became compulsory for suppliers as of April 1st 2014. They’re extremely important if you want to sign up to a cheaper tariff.
The contract end date details when your current deal expires – the date from which your rates will increase if you don’t arrange a new deal.
However, the notice period end date is even more vital, as this is the point by which you have to notify your supplier that you’ll be switching to a different deal at the end of your contact. If you fail to arrange a switch before this date, your business will end up paying over the odds for its energy until you’re next able to sign a new deal.
It can be difficult to understand the difference between the two dates, but our energy experts will be able to talk you through their relevance in more detail if you’re unsure when you need to act.
Beyond your standing charge, unit price and relevant contract dates, the other information printed on your bill is there to explain how your overall costs have been calculated.
That’s because factors such as the Climate Change Levy and VAT can have an impact on how much a business pays for its energy, so both these costs will be displayed on your bill.
If you have a smart meter that you’re charged for then this information will be printed on your bill too – again, it depends on the arrangement with your supplier and how your energy usage is measured.
For more information about your bills and to see if you can switch to a better deal today, call uSwitchforBusiness on 0800 188 4930 to compare business energy prices.