Business energy billing explained
We explain terms from your energy bill in plain English.
What is a standing charge?
Suppliers have to pay various costs no matter how much (or little) energy a customer uses. The standing
charge is a fixed charge designed to recover these costs. These costs include the distributor's cost of trans-
porting energy to your premises and the meter operator's cost of looking after your meter.
To transport energy to your business, energy suppliers have to pay a fee to the National Grid or local distribu-
tor that owns the pipes or wires through which the energy travels. If your premises are in a remote or rural
area, your standing charge may be higher because it costs more to transport your energy and repair any
damage to the network caused by, for example, bad weather.
Your standing charge is usually a fixed daily amount. So, if your standing charge is 91p a day, your monthly
standing charge will be around £27.68.
Here's how it's calculated:
91p per day X 365 days in a year = £332.15 per year.
£332.15/12 months in a year = £27.68 per month.
Your unit rate is the price you pay for the gas or electricity you use, usually measured in pence per
Depending on your type of meter, you may have two or more different unit rates for electricity, for example day,
night and weekend rates.
Deemed rates are, usually, more expensive than rates on a Fixed Price Plan.
A kilowatt hour, or kWh, is the unit of measurement that energy suppliers use to work out customer bills. It's
equivalent to one kilowatt - or a thousand watts - running for one hour.
Your electricity meter will record your usage in kWh. Your gas meter will record your usage in cubic metres or
cubic feet, which is then converted into kWh.
When you move to a new site, the existing energy supplier to the property will temporarily put you on a
'deemed' rate. This is because a contract is automatically deemed to exist. It‘s treated as an existing contract
between you and the supplier.
Deemed rates are generally higher than the rate you'd get in a contract you've actually chosen. This is
because deemed rates are short-term rates and the energy is bought short term. If you get in touch with us,
we can generally put you on a much more competitive contract rate.
Variable Price Plan
If for any reason your Fixed Price Plan has come to an end Variable Price Plan rates will apply.
It's a bit like moving to a standard variable rate on your mortgage when your fixed rate deal ends. Variable
Price Plan rates are generally higher than rates on the Fixed Price Energy Plan, so it’s always best to review
your plan in good time.
Do you need help or more information?