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Business Energy: How to understand a business energy bill

21/05/2021

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What makes up your Business energy bill?

A lot of businesses ask for help regarding how to understand  a business energy bill. Troo customers have the advantage of the troo assure team being on hand to answer any queries and carry out yearly bill checks. If you are not fortunate enough to have troo in your corner, the following may be of use:

Cost of Energy

The most significant element of your bill will be the cost of the actual energy itself, often referred to as the commodity cost. The commodity cost reflects the actual power or gas you have used in the billing period referenced.

 

The amount is stated as a rate per kWh (kilowatt-hour). The rate is set against your usage in the period as per your meter reading  to determine the amount due. It’s essential to make sure these readings are accurate to prevent under or over billings. An “E” next to the reading indicates an estimated usage rather than the actual power consumed. It’s vital to keep meter reads up to date, so if you do receive an estimate, we always advise you to update the supplier with actually reads as soon as possible. If you have a smart meter or a half-hourly meter, the reads are usually sent directly to your supplier, so there is no need to worry.

 

Often your rate will include more than just your commodity cost and include other third party costs. Tariffs that include these costs are often termed fully fixed as they will not change throughout the contract. If you have a “pass-through contract”, these costs may be charged as separate line items, and, as such, any risk of increases in rates rests with you.

Pass-through charges

Often termed third-party charges, these are collected on behalf of the companies that keep the network operational and include:

Distribution charges

Often referred to as DUoS, the charge reflects the actual cost of delivering energy to the meter via the national grid.

Transportation charges

This charge relates to the cost of transporting and delivering the energy in the network.

Balancing charges

The Distribution Use of System (BSUoS) refers to a charge paid to National Grid to keep the system on balance. This charge ensure what is used is  generated.

Settlement and agency charges

These charges cover the maintenance of the meters, including installation and data collection.

Renewable Obligation

Charges also include green levies, which are paid directly to the Inland Revenue.

Standing Charges

The standing charge is a fixed price per day and is payable no matter how much energy you consume. The amount represents the cost associated with keeping your meter connected to the energy network, a bit like line rental on a telephone. It’s a significant number to keep in mind, especially if you anticipate your business closed at any point (lockdowns!) as it is due regardless of whether you are open or closed.

How to understand your business energy bill is critical to controlling your cost, fig you are unsure please call the troo team on 08080 164 2222

 

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