We know that diving into your energy bills might not be your idea of fun, but understanding them can lead to smarter decisions and, ultimately, savings. Let’s break down the key components of your business energy bill in a straightforward and slightly fun way.
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Unit Rate (pence per kWh)
This is the charge for each unit of energy your business consumes, measured in kilowatt-hours (kWh). Think of it as the cost of fuel for your operations. The more energy you use, the higher this part of your bill will be.
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Standing Charge
A fixed daily fee that covers the cost of supplying energy to your premises, including maintenance of the network and infrastructure. It’s like a subscription fee to keep your business connected to the energy grid, regardless of how much energy you use.
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Taxes and Levies
Several additional charges can appear on your bill:
Value Added Tax (VAT): Typically set at 20% for businesses, but some may qualify for a reduced rate of 5% under certain conditions.
Climate Change Levy (CCL): An environmental tax aimed at encouraging businesses to improve energy efficiency and reduce carbon emissions. Some businesses may be exempt or eligible for discounts.
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Distribution Use of System (DUoS) Charges
These charges cover the cost of distributing electricity from the national grid to your business premises. DUoS charges can vary based on your location and the time of day you use energy, with peak times often incurring higher rates.
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Transmission Network Use of System (TNUoS) Charges
These charges cover the cost of transporting electricity across the high-voltage transmission network. Like DUoS charges, they can vary depending on your location and usage patterns.
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Metering Charges
Fees associated with the provision, maintenance, and reading of your energy meter.
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Contract Terms
Your bill will also include details about your energy contract, such as the start and end dates, and any agreed-upon rates. Keeping an eye on these dates can help you renegotiate or shop around for better deals when your contract is up for renewal. Renewing soon? Speak to Ruby today to find out why SME’s are choosing Ruby as their energy partner.
Tips for Managing Your Energy Costs
Monitor Your Usage: Regularly check your energy consumption to identify patterns and areas where you can reduce usage. Using a Smart Meter can help. Click here to Speak to Ruby to explore securing a free Smart Meter.
Improve Energy Efficiency: Invest in energy-efficient equipment and practices to lower your consumption.
Review Your Contract: Ensure you’re on the best tariff for your business needs and consider renegotiating terms or switching suppliers if better options are available.
Consider Smart Meters: They provide real-time data on your energy usage, helping you make informed decisions and potentially reduce costs.
Understanding your business energy bill doesn’t have to be daunting. By familiarising yourself with its components, you can take control of your energy usage and make decisions that benefit both your bottom line and the environment.
