How to read a business energy bill
A business energy bill is easy to overpay on because the expensive parts hide in plain sight. Here is what each line actually means, and where money quietly leaks out every month.
The main parts of a business energy bill
Most business energy bills carry the same handful of components, whatever your supplier calls them. Once you know what each one is, it becomes far easier to see whether you are paying a fair price or quietly overpaying on a rate that lapsed months ago.
Unit rate
The price you pay per unit of energy used, measured in pence per kWh. This is where the bulk of a bill is made, and where a poor contract hurts most.
Standing charge
A fixed daily charge you pay whatever your usage, to cover the cost of your connection and meter. You pay it even when the site is closed.
kWh used
Your actual consumption for the period. If the reading says estimated, the figure is a guess and could be too high.
MPAN or MPRN
The unique number that identifies your electricity meter (MPAN) or gas meter (MPRN). Suppliers use it to switch and quote your supply.
VAT and CCL
Value Added Tax plus the Climate Change Levy, a government tax on business energy. Some businesses qualify for a reduced rate.
Capacity charges
On larger sites you also pay for the capacity you reserve, measured in kVA. Reserve more than you use and you pay for fresh air.
Where businesses overpay
The costly mistakes are rarely on the front page in bold. They hide in the detail. The most common is a contract that has lapsed onto deemed or out of contract rates, which can sit far above a fair renewal price and apply the moment a fixed deal ends. Next is the estimated read, where the supplier bills a guess rather than your real usage, often in their favour. On bigger sites, an agreed capacity that is set too high quietly adds cost every month. And on many contracts a broker commission is baked into the unit rate, so you pay for it without ever seeing it named.
If any line on your bill says estimated, or you cannot remember when you last renewed, those are the first places to look.
Common questions
What is the difference between the unit rate and the standing charge?
The unit rate is the price per kWh for the energy you actually use. The standing charge is a fixed daily cost you pay regardless of how much you use, even when the site is closed.
Why is my bill estimated?
If the supplier has no recent meter reading it estimates your usage. Estimates are often high, so submitting a reading or checking your meter is being read can correct an inflated bill.
What is CCL on my bill?
CCL is the Climate Change Levy, a government tax on business energy use. Some businesses, such as charities and very low users, can qualify for a reduced or zero rate.
How do I know if I am overpaying?
Compare your unit rate and standing charge against what the market is offering today. A review checks every line for you and shows where you could save.
More from OptiFlow Watch
Not sure what you are paying for?
Send us a recent energy bill and we will read it line by line, then show you any saving guaranteed in writing.