Utility bills are payments for essential services in your property, typically referring to gas, electricity, and water. The types of utilities your business uses will vary depending on your industry, as well as on the size of your business.
For example, in the UK it is a legal requirement to provide hot running water in the workplace under the Workplace (Health, Safety and Welfare) Regulations 1992, but will likely be a larger utility bill for hospitality companies than those in sales.
With ¾ of consumers in the UK admitting to being confused about their energy bill, this article aims to help debunk what bills you may face, what to expect, and why your bills may fluctuate.
A gas utility bill details heating costs, heating, and cooling your business.
An electricity utility bill details electricity usage and the cost from your supplier.
A water bill will calculate the amount and cost of any water entering and leaving the property.
These are the three main types of utility bills, but this is not an exhaustive list. For example, a landline phone bill can be another utility bill for some businesses.
Utility bills are monthly statements which detail how much these utilities cost. For each utility, it will outline prices, a breakdown of what you’ve been charged, and other key information- your account number, where to send payment and more. Each utility bill should outline the exact amount you need to pay and – crucially- outline why.
Information about utility bills and how your charges have been calculated must be provided by your supplier in an accessible and intelligible way according to The Electricity and Gas (Billing) Regulations 2014.
Businesses are only able to get a single-fuel contract, meaning that electricity and gas cannot be combined into one bill. Therefore, gas is one utility bill and electricity is another, separate utility bill.
Your gas utility bill will vary depending on the type of contract you have with your supplier. There are two main types of contracts- fixed-rate business gas contracts and variable-rate business gas contracts.
A fixed-rate contract means you pay an agreed amount to your supplier for every kilowatt hour (kWh) of energy your business uses. This type of utility bill is more of a pay-as-you-go style, paying a set amount dependent on the amount of kilowatt hours (rather than the same amount each month). As this type of contract is dependent on usage, your utility bill can be different each month as you use more/less gas. Typically, gas utility bills of this nature are higher in the winter months as you use more gas to heat your business.
A variable-rate contract means that your bill fluctuates in accordance with the energy market. This means that your utility bill fluctuates in accordance with external sources, rather than a set rate according to your usage. This can mean paying higher or lower prices for gas throughout your contract, because the utility bill will change in accordance with market changes.
Whilst these contracts are different ways of calculating a utility bill, there are features of a gas utility bill that should be present on any contract. These are unit costs and standing charges.
A unit cost displays the amount you are charged for the gas you have used. This is measured in kilowatt-hours (kWh). Lower kWh indicates lower gas usage, for example using less heating. With a fixed rate contract, the measure of kWh will be fixed at a price agreed between you and your supplier at the start of your contract.
With a variable rate contract, the price for each kWh will not be fixed. Instead, it depends on the energy market rather than a set agreement between you and the supplier. For this reason, the unit cost can rise and fall across different utility bills.
Another feature that should be on your utility bill, regardless of contract type, is a standing charge. This is a rate that you pay to remain connected to the gas grid and must be paid by all businesses regardless of the amount of gas usage.
Electricity bills should also clearly outline the unit cost and standing charge, so you can see how much electricity usage your business has undergone, as well as the cost of each kilowatt hour.
The type of contract your business has with your electricity provider can either be fixed-rate or variable-rate, but the unit cost and standing charge should be clearly outlined.
Electricity utility bills are similar to gas utility bills, but remember that they cannot be combined! This means they are two separate bills, and you can choose whether to have the same electricity and gas supplier or opt for two different providers.
Water utility bills can vary depending on whether you have a water meter or not. This is what is referred to as either being a metered customer or an unmetered customer and alters how your utility bill is calculated.
For businesses with a water meter, water and wastewater charges are based on how much water your business has used. Water usage is measured in cubic meters, which is then used to calculate your utility bill.
Water suppliers charge metered customers for the number of cubic meters they have used. One cubic metre is equivalent to 1000 litres, but different suppliers will have different rates and pricings.
With unmetered customers, charges are fixed for the length of your contract. The utility bill is not based on the amount of water usage, but instead based on the ‘rateable value’ of your business. Rateable value is based on:
– Size of the property
– Condition of the property
– Location of the property
The Valuation Office Agency gives all businesses in England and Wales a rateable value, which is updated every 5 years.
For unmetered customers, water utility bills are calculated by multiplying the rateable value by providing charges set by the supplier.
The next logical step to take once you receive your utility bill is to pay it!
If you are unsure of anything or unable to pay your bill, you can contact your provider. If you feel you need more support or advice, you can contact Citizens Advice.
There are a variety of payment options depending on your supplier, such as:
– Making Payments Online
– Paying Via The Supplier’s Mobile App
– Paying Over The Phone
– A Direct Debit Payment.
Many things can alter the final price of your utility bills, depending on what contracts you have with your suppliers. For instance, with fixed gas contracts, market fluctuations are not an affecting factor. The one factor which will impact the final price is the amount of your consumption. Below is a brief overview of common factors which can impact utility bills.
Ongoing severe weather conditions such as storms can damage power lines, and disrupt distribution systems, The cost of repairs can result in suppliers raising prices, which raises the cost of your utility bill.
Another way weather can affect your utility bill is extreme temperatures, e.g. during heatwaves, businesses tend to increase air conditioning usage, whilst in winter there is higher heating usage. This higher consumption is reflected in the price of bills.
The ongoing Russia-Ukraine conflict has impacted energy prices, causing many companies to raise their prices. This has a knock-on effect for businesses that have seen an increase in their utility bills as a result.
For example, Russia is the second largest producer of natural gas. Following the invasion of Ukraine, Russia was subject to economic sanctions which restricted exports of natural gas. There have been fears in the headlines of power blackouts from the National Grid, and although unlikely, remains a possibility during peak hours between 5 pm and 8 pm if demand exceeds supply.
Market changes can stem from all these factors. For example, when the raw materials to create energy increase in price, suppliers increase prices to match the rise in their production costs. Some utility bills may be more directly linked to market changes depending on your contract type, such as variable-rate contracts, where prices are dependent on the market.
At Tariff, we work with trusted supplies to provide your business with the utilities of gas, electricity, and water. Our energy switching service can cut costs and secure your business with a better deal, lowering your overall utility costs. We are here to support your business with switching to the right providers whilst minimising your carbon emissions. On top of that, we will never pressure you to make a decision that isn’t optimal for your business needs.
Tariff can also help manage and cut your utility usage, providing cost-effective solutions that work for you and your business needs. Our consultants are here from the initial consultation to the very end of your contract, to provide support in your transition and management of utilities.
Switching gas suppliers with Tariff is an effective way to decease costs and your carbon footprint, and help you reduce expenditure with a smart meter.
Choosing to switch electricity suppliers with Tariff saves you money on future contracts, getting you the best deal on business electricity.
To help your business get the best from your water supplier, contact Tariff for independent recommendations and take control over your water utility bill. Our water audits will not only analyse your bills but calculate if you are overspending with your current provider. Tariff can also make recommendations on how to improve efficiency, saving on usage and business costs.
Contact our team at Tariff.com today for a free consultation and to get started on your journey to easier, more efficient utilities!
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