1. Understanding your Invoice.
Unfortunately most people will double check their shopping bill before they will check their energy invoice. A recent study showed that more than 50% of all energy invoices have errors (mostly overcharges), but these errors are not discovered due to the lack of public knowledge about the many different charges found on an energy invoice.
Further to the recent Energy Market Reform, you may soon find that there are a lot more levies and transmission costs being added to your energy invoices. Although most of these charges are passed through the energy supplier from the network operators, some of these charges may not be compulsory to your supply.
Tip: Always keep a copy of your energy contract in the energy invoice file.
For a comprehensive explanation regarding the various charges that can be found on an energy invoice, make sure to check out next month’s newsletter.
2. AMR and SMART metering
Energy suppliers are only obligated to manually read your energy meter once a year and many of them stick to this rule. Even then, a meter read visit during a busy period can still be quite an inconvenience. Numerous complaints regarding estimated billing has pushed OFGEM to change the regulations regarding energy metering and energy suppliers are now obligated to install AMR (Automated Meter Readers) or SMART meters to every commercial electricity supply.
SMART meters are installed free of charge by energy suppliers, but do incur a small daily data charge, which is added to your invoice. A SMART meter works by sending consumption read (usually via SMS) every half hour to the Meter Operator, eliminating estimated billing. Consumption loggers and communication devices are added to gas supplies, but check with your gas supplier to see if they will fit these for free as well.
“So, SMART means no more estimated bills?” Well Yes, but don’t call your supplier just yet if you haven’t got one, as there are some interesting new charges on the way that are associated with SMART metered supplies.
Tip: If your profile class is ‘00’, you already have an AMR/SMART meter fitted. If your profile class is ’05’-‘08’ and your unsure whether there is a SMART meter fitted on site, look at your Electricity bill to see if you are paying data charges.
3. P272 and mandatory energy submissions
Look at your electricity invoice for the MPAN numbers. It should look something like this:
Electricity profile classes are located within the top left hand box.
Commercial electricity profile classes are listed between ‘03’ to ‘08’ and known as sub 100 supplies. ‘00’ profiles are known as half hourly supplies and are intended for high demand commercial supplies.
‘01’ & ‘02’ profile classes are for domestic supplies only. If your supply has this profile, call us immediately!
From 1st April 2016, electricity Suppliers are obligated to settle all SMART metered supplies with profile classes ‘05’ to ‘08’ as half hourly ‘00’ profiled supplies. This means that your MPAN profile will change and you will soon begin to pay various transportation costs associated with Half Hourly supplies, such as
- An annual MOP/DC (Meter Operator/ Data Collector) Agreement
- Distribution Use of Systems (DUoS)
- Transmission Use of Systems (TUoS)
- KVA or Capacity Charges.
This is as well as the current Renewables Obligation (RO) and Feed-in-Tariff charges introduced over the last couple of years. RO & FiT charges are usually added to the overall unit price.
If your business is a large user of energy, you should be already registered for the Government’s mandatory CRC (Carbon Reduction Commitment) Energy Efficiency Scheme and ESOS (Energy Savings Opportunity Scheme) reporting schemes. More details on the mandatory CRC and ESOS schemes will be discussed in future articles we will be publishing with Hospitality & catering News.
Tip: If you think that these issues will affect your business and you need some immediate answers, give us a call.
4. Energy Supplier Online Portals
If you have a SMART metered electricity supply or a data logged gas supply, most energy suppliers now provide an online portal which will show your consumption in detail. It is important that you use your supplier’s online portal to check and benchmark your site’s energy consumption for yearly budgeting and development purposes.
Tip: If you are already using your energy supplier’s online portal, also look for gaps in consumption information as this will show whether your SMART meter and its communications unit is working properly.
5. Benchmarking your consumption
If your business has multiple supplies or sites, energy performance benchmarking is the key to understanding which of these supplies needs additional attention. Your energy bill will only show the entire consumption of the main supplies to your business and not the consumption of each section. Departmentalising sections of your business such as front and back of house, kitchens and leisure facilities through sub metering, gives a higher degree of site consumption information which can be used to facilitate further awareness within your business.
6. Co-ordinating your multiple energy supplies
If you have multiple sites or metered supplies, collectively coordinating all of them to be supplied under the same supply contract can be a bit of a nightmare, but well worth the effort. Energy procurement is mainly based on consumption, so the bigger the collective consumption, the better the rate offered. It’s that simple!
Tip: Multi-start contracts and end of term supply date alignments are services which most energy suppliers offer, but usually not directly to the SME end user. If you would like to discuss or take advantage of these bespoke procurement services, contact us.
7. The ‘Big 6’ assumption.
Most businesses still go directly to the ‘Big 6’ energy suppliers (British Gas, EDF Energy, EON Energy, Npower, Scottish & Southern Energy and Scottish Power) due to the fact that these are the companies always in the limelight, but these are the ‘Big 6’ domestic suppliers and not the biggest commercial energy suppliers in the UK!
There are now over 20 commercial energy suppliers in the UK marketplace and some energy suppliers such as Total Gas & Power, GDF SUEZ (soon to be ‘Engie’), Dong Energy (previously Shell Gas) and GAZPROM are actually bigger than some of the ‘Big 6’ domestic energy supply companies.
Tip: The most competitive price offered to you for Gas from any supplier during the ‘Winter Pricing Curve’ (1st November to 28th February) will always fall short of a average Gas price offered within the summer months.
Set a time during the year to review your current energy costs when you can take advantage of seasonal lower energy prices. A good time to review your energy contracts are within the shoulder seasons of spring and autumn.
8. Know your energy supplier’s T’s & C’s
It is very important that you read through the T’s & C’s of your energy supplier. This will give you information regarding the period of notice you are obligated to give your energy supplier, if you wish to shop around for a better deal at the end of your supply contract. It will also state your suppliers terms regarding over or under contracted energy usage (known as ‘Take or Pay’) and what to do if you intend to move from your current site.
9. Green/Renewable Energy
‘Green’ or Renewably sourced Electricity has been a sore subject in the Energy industry this year; post the Government’s budget announcement that all levy exemptions associated with renewably sourced electricity will no longer exist. This means that CCL (Climate Change Levy) charges will now appear on renewable energy invoices. Many energy suppliers at the moment have removed their renewably sourced electricity products from the market until further details of the withdrawal of levy exemptions has been published by the Government and OFGEM.
However, this is not the case for commercial Gas from a renewable source as yet, but there are whispers. So hurry, if you haven’t already, and get your Green Gas supplies!
The recent removal of the levy exemptions does not mean that renewably sourced electricity has become a thing of the past. Energy suppliers who are still offering renewably sourced Electricity products will add an average 0.25p per kWh to current and new renewably sourced electricity contracts.
Alternative renewable power supplies such as PV Solar Panelling and Biomass CHP (Combined Heat & Power) and are still very popular avenues for a lot of businesses which need to retain their Green credentials.
10. Use Hotel Energy as your energy information resource
Energy represents the second highest expense within many businesses in the hospitality and catering industries. Our ethos is to build energy knowledge and awareness within these service industries.
Each month we will be updating you here in Hospitality & Catering News with energy information which could affect your business, show you various ways to become more energy efficient and most importantly, help save you some money against your current energy costs.
We are also offering Hospitality & Catering News readers a free (yes free!) energy invoice review during October, so get in touch ASAP. It could save you a significant amount of money.
Hospitality & Catering News recently met up with Maud Rebillet-Bergeon, Commercial Director at Hotel Energy to learn more about the business read the interview here.
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