How billing works

What makes up your business energy bill?

A typical business energy bill is made up of the following costs:

• Network costs
  Also known as transportation costs, are a significant part of your energy bills. These costs cover the maintenance, building, and operation of the gas and electricity infrastructure that delivers energy to your home and is mainly paid to Network Operators.
• Wholesale costs
  Commodity Costs refer to the charges you pay for the actual energy you use, which is based on your level of consumption. These are the costs directly associated with the production and supply of energy, such as the cost of generating electricity and purchasing natural gas. Commodity costs can fluctuate based on factors like fuel prices and supply-demand dynamics.
• Environmental costs
  Often referred to as green levies or environmental and social obligation costs, are contributions paid by consumers via larger energy suppliers towards various energy policies
• Operating costs
  These costs are the expenses involved in running a retail energy business. They include aspects such as customer service, IT systems, billing, premises, and the cost of metering, such as the cost of providing the meter itself and the data handling responsibilities involved in meter readings.
• Third party costs
  Broker costs refer to the fees that energy brokers charge for their services. Energy brokers, also known as Third-Party Intermediaries, help businesses find the best rates in the market for their energy bills.

Business electricity

Business gas

How's my bill calculated?

Your gas or electricity bill is made up of two elements:

• The standing charge – the fixed daily amount that covers the costs of transporting energy to your premises and maintaining your meter. It varies depending on where your business is based. You pay the standing charge no matter how much energy you use.
• The unit rate – the price you pay for the gas or electricity you use, usually measured in pence per kilowatt-hour (kWh). Depending on your meter, you might have different unit rates for electricity, such as day and night rates. One kWh is roughly what you need to use a desktop computer for four hours.

Your electricity meter will record your use in kilowatt-hours (kWh).

Your gas meter will record your use in cubic metres or cubic feet. This is then converted into kWh.

• For electricity, this means using an average of less than 33 kWh per day (1,000 kWh per month)
• For gas, this means using an average of less than 145 kWh per day (4,397 kWh per month)

How much VAT am I paying?

The bottom portion of your bill tells you how much VAT you're paying and the VAT rate that we’re charging you.

VAT is normally charged at the standard rate, currently 20%.

Businesses that meet the minimal use requirements are billed at a VAT rate of 5%.