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How Is Your Bill Made Up?

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This varies with the amount of energy consumed. Smaller or micro-business are likely to be billed in a similar way to a household customer on a tariff. The industrial and commercial customers have detailed costs of different elements of the energysupply such as balancing of the system and network transportation charges. Business customers do not face paying for the Carbon Emissions Reduction Target or the Warm Homes Discount programmes, which are additional elements in the household bill.

Wholesale Cost This is the largest proportion of your energy bill and is the basic cost of energy.

Transmission and Distribution Cost This is the cost of moving energy around the country. For gas this is through a network of high and low pressure pipes and electricity through over or under ground wires. Suppliers recoup costs from consumers, who then pass this on to the distribution and the transmission companies for the region the consumer is in. Charges are agreed in advance with the energy regulator Ofgem, and change at least annually. This fraction of the bill generally accounts for 15%-25% of the bill.

Climate Change Levy All business customers are now liable to pay CCL. This is a tax aimed at encouraging businesses to become more energy efficient. From April 2014 the rates will be £0.00541/kWh electricity and £0.00188/kWh for gas. Electricity suppliers are expected to pass through the costs of meeting government mandated programmes, such as the Renewables Obligation. Energy intensive companies are entitled to a 65% Climate Change Levy rebate.

Profit Cost Non-domestic contracts are priced individually by suppliers. They make their own assessments of their costs to serve plus desired profit for each contract in assessing their own margins. The margin a supplier offers depends on: the duration of the contract; the variability of your load profile; your credit status; and wider market sentiment when your commercial agreement was reached. As a consumer you can influence and even reduce this margin by securing competitive offers from different suppliers.

Metering Services This figure is variable and will change customer-to-customer as well as on a site-by-site basis. VAT VAT for business consumers of energy is generally in-line with standard VAT rates, which currently stands at 20%.


Alfa Energy Group

Alfa Energy Group is an international energy, water, and sustainability consultant partner with 200 employees over 4 international locations. For over 25 years, Alfa has been servicing its clients’ needs through energy and water management, sustainability, and compliance consulting, and an intuitive ecosystem of user-driven energy, water, and carbon management software platforms. With coveted awards, an international industry-wide recognition, and clever simple solutions, today Alfa is partnering with clients to establish and deliver pivotal net zero strategies. Through smart energy management, the expertise and diligence of its people, transparent processes, and data management, Alfa continues to lead through its recognised gold standard of service delivery.