A business electricity bill sets out what a company owes its supplier for the electricity it has used over a given period, broken down into several separate charges.
This guide explains each component of the bill, how it’s calculated, why it can change month to month, and the errors that can sometimes appear on it.
What is a business electricity bill?
A business electricity bill is the invoice a supplier issues to a company for the electricity it has consumed over a given billing period.
At minimum, it shows how much electricity was used and its cost, and the additional charges attached to supplying it, such as standing charges and taxes.
For non-standard tariffs and supplies, such as flexible green tariffs or three-phase power sites, the bill may also include additional charges separately, such as blended unit rates and reactive power charges.
All bills include account and site-specific details, such as the MPAN, the billing period covered, and the meter readings or estimates the charges are based on.
Charges underlying business electricity bills
Most business electricity bills are simplified to ensure consumers can understand what they owe and why.
Standard unit and standard charges encompass over a dozen separate underlying costs, such as operating, maintaining and developing electricity infrastructure, government levies and subsidies, and other site and supplier-specific costs.
If you are interested in understanding the details, see our comprehensive guide to business electricity charges.
Business electricity bill example
A business electricity bill is broken down into standard components that appear on all bills, and additional components that depend on the specific contract type or the meter type in use.
Standard components of all business electricity bills
Below are the components that are presented by all business energy suppliers:
Additional components
The following components may appear on non-standard contracts such as flexible, green and pass-through contracts, and half-hourly metered sites.
Note that they may appear grouped under different names such as “network charges”, “agent charges”, “reconciliation charges” or “additional charges”.
How are business electricity bills calculated?
A business electricity bill is calculated by adding together each applicable charge line by line, until they reach the total amount due.
The core calculation is the same for every bill, with extra charges explicitly added for pass-through contracts.
The following straightforward calculation is done for all bills:
Additional charges for half-hourly metered supplies
On half-hourly metered supplies, typically larger or higher-consumption sites, the following are added to the base calculation:
Calculating bills for estimated consumption
Where no actual meter readings are available to a supplier, a bill will use estimated opening and closing meter readings to calculate the consumption during the billing period.
The estimate will be adjusted on a later bill once an actual reading is obtained, correcting for any difference between estimated and actual consumption.
Why can a business electricity bill change from month to month?
Here are various reasons why business electricity bills can vary from month to month:
- Consumption changes: The amount of electricity used naturally varies month to month based on trading patterns, seasonality, or operational changes at the site.
- Estimated versus actual readings: If a bill was based on an estimated reading, it can be adjusted upwards or downwards once an actual meter reading is obtained.
- Number of billing days: Standing charges and some other costs are calculated per day, so a longer or shorter billing period changes their total.
- Market movements (flexible contracts): On a flexible energy contract, the unit rate reflects the blended rates of wholesale market purchases associated with electricity used during the billing period.
- Rate or charge changes: Passed through non-commodity costs such as DUoS, TNUoS and CCL rates are reviewed annually by the relevant bodies and can change during the contract.
- Time of use charges: Some meters track how much electricity is used during different time bands, such as day and night, so a shift in when electricity is used can change the bill even if the overall consumption stays the same.
Common errors on business electricity bills
Although uncommon, business electricity bills can contain errors, most of which come down to administrative or system mistakes rather than genuine charges.
This can include the wrong MPAN being associated with the account, an incorrect unit rate applied, or a misread meter reading being used to calculate the bill.
Because almost any part of a bill can be affected by this kind of mistake, it’s worth checking the full bill rather than any one specific figure, particularly on the first few bills of a new contract, or after any change to the account, meter, or tariff.
For businesses receiving multiple invoices across several sites, checking each one manually is often not practical. Our Energy Bureau Service checks every invoice as it comes in, catching errors like these before they go unnoticed.
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