How to read a business energy bill

Business energy bills vary a lot between suppliers, and Ofgem has acknowledged that many business customers find them hard to follow. The good news is that almost every bill is built from the same parts. Once you know what each line means, you can check the bill is right, spot errors, and compare your costs with other quotes.

What should a business energy bill show?

A business energy bill should show your supply reference number (MPAN for electricity, MPRN for gas), your meter readings and whether they are actual or estimated, the energy you used in kWh, your unit rate and standing charge, any other charges, the Climate Change Levy and VAT.

Some of this is required by suppliers’ licence conditions. Suppliers must show your electricity supply number or gas meter point reference number on each bill, and tell you how to use the dispute scheme if something goes wrong. For microbusinesses on fixed-term contracts, the bill should also show the date your contract ends.

Ofgem has also agreed voluntary best practice with suppliers. It says bills should clearly flag out-of-contract or deemed rates, show whether readings are actual or estimated, and state the contract end date and how to end the contract.

What supply and account details should you check?

MPAN (electricity)

Your MPAN is the unique reference for your electricity supply point. The full version has two lines:

• Top line: the profile class (00 means half-hourly), the meter timeswitch code (which shows the meter’s capability and any multi-rate time pattern) and the line loss factor class (which identifies your network tariff).
• Bottom line, the MPAN core: 13 digits made up of a two-digit distributor ID, a unique reference number and a check digit. The distributor ID tells you which of the 14 distribution regions you’re in.

Our MPAN guide explains each part in more detail.

MPRN (gas)

Your MPRN is the unique reference for your gas supply point. See our MPRN guide.

Meter serial number

This identifies the physical meter. Check it matches the meter on your premises, especially if you have more than one. See meter serial numbers.

Tariff and contract end date

Look for the name of your tariff or contract and your end date. If the bill says you’re on deemed or out-of-contract rates, act quickly: Ofgem and consumer groups say these are usually among a supplier’s most expensive. See out-of-contract rates.

Is your bill based on an actual or estimated reading?

Every bill should tell you whether it’s based on an actual reading or an estimate. An estimated bill uses standard industry figures or your usage history instead of a real reading.

Under their licence conditions, suppliers must take all reasonable steps to read your meter at least once a year and must make a bill or statement available at least twice a year, or quarterly if you ask or manage your account online. They can’t charge extra for a bill unless you ask for a duplicate. If you give them a reading, they must take all reasonable steps to use it, as long as it looks reasonably accurate.

Half-hourly meters send readings automatically every half hour, so bills on those supplies are normally based on actual data.

What electricity charges can appear on a business bill?

Unit rate, and day and night rates

The unit rate is the price per kWh. On a single-rate tariff there’s one price. On a two-rate (economy) tariff there’s a day rate and a cheaper night rate, and your meter records each separately. Elexon, which runs electricity settlement, has separate profile classes for single-rate and two-rate business meters.

Some tariffs have more time bands. Ofgem describes time-of-use tariffs as ones where prices vary by time of day or day of the week.

Standing charge

A fixed daily charge for each supply. See business energy standing charges.

Capacity (kVA) charges

Larger sites have an agreed supply capacity with the network operator, measured in kVA. Ofgem describes this as the amount of electricity your distributor makes sure is available to you at any time.

You pay a capacity charge in pence per kVA per day, whether or not you use all of it. If you go over it, an excess capacity charge applies. Under the network charging statement we checked, the excess is charged for the whole month in which it happens, and an agreed capacity can’t be reduced for 12 months.

Reactive power charges

Some electrical equipment draws “reactive” power that doesn’t do useful work but still has to flow through the network. Ofgem explains that high reactive power puts extra strain on the network, and this charge contributes to the cost.

On half-hourly metered supplies, reactive power charges apply when reactive power (kVArh) is more than 33% of active power (kWh), which is equivalent to an average power factor of 0.95. The network charging statement says these charges are generally avoidable if the electrical installation keeps the power factor between 0.95 and 1.

Network time bands

Half-hourly bills may split network unit charges into red, amber and green time bands. The times depend on your network operator. For example, in Southern Electric Power Distribution’s area the red band for low and high voltage connected sites is 4:30pm to 7:30pm on weekdays, all year.

Other network and policy charges

Some bills, particularly for larger sites or pass-through contracts, list charges separately rather than including them in the unit rate. Ofgem’s glossary explains the common ones:

• DUoS: distribution use of system, the cost of local networks
• TNUoS: transmission network use of system, the cost of the national grid
• BSUoS: balancing services use of system, the daily cost of balancing supply and demand
• Losses: transmission and distribution losses
• Environmental and social costs: schemes such as the Renewables Obligation and Contracts for Difference
• Meter operator charges: if a meter operator charge appears that wasn’t in your contract, it’s a default charge you can query

What gas charges can appear on a business bill?

How is gas converted to kWh?

Gas meters measure volume, but you’re billed in kWh. The calculation is set by the Gas (Calculation of Thermal Energy) Regulations 1996. Here is how to check it:

1. Units used: current reading minus previous reading.
2. Imperial meters only: if your meter measures in hundreds of cubic feet, multiply by 2.83 to convert to cubic metres.
3. Multiply by the calorific value (CV) shown on your bill, in megajoules per cubic metre. This measures the energy in the gas. It varies, so the figure on your bill is an average for the gas supplied to you.
4. Multiply by the correction factor, 1.02264, which adjusts for temperature and pressure.
5. Divide by 3.6 to convert megajoules to kWh.

Example, using a CV of 39.5 MJ/m3: 1,000 cubic metres x 39.5 x 1.02264 / 3.6 = about 11,221 kWh.

Check which type of meter you have. If an imperial meter is billed as if it were metric, the bill will be about 2.83 times too low, which can lead to a large catch-up bill later. If a metric meter is billed as imperial, it will be about 2.83 times too high.

Gas unit rate and standing charge

These work the same way as for electricity: a price per kWh and a fixed daily charge.

Which taxes appear on a business energy bill?

Climate Change Levy (CCL)

A tax on business energy use. The main rate is 0.801p/kWh for both electricity and gas from 1 April 2026. It is charged on units only, not the standing charge. Businesses with a Climate Change Agreement get 92% off for electricity and 89% off for gas. See our Climate Change Levy guide.

VAT

Most businesses pay 20%. The 5% reduced rate applies to de minimis supplies: electricity averaging up to 33 kWh a day (or 1,000 kWh a month) and gas up to 145 kWh a day (or 4,397 kWh a month), as well as to charities’ non-business use. If at least 60% of a supply is qualifying use, all of it gets the reduced rate. Qualifying electricity supplies in Great Britain are zero-rated from 1 October 2026 to 31 March 2027. See our VAT on business energy guide.

What are the most common business energy billing errors?

Many billing problems fall into a few groups:

• Long runs of estimated reads, which can drift a long way from real usage.
• The wrong meter. Check the MPAN or MPRN and serial number match your supply.
• Imperial and metric mix-ups on gas meters, as explained above.
• The wrong VAT rate or CCL treatment, for example a small user under the de minimis limits being charged 20% VAT.
• Out-of-contract rates because a renewal was missed or not processed.
• Charges you didn’t agree, such as a default meter operator charge.
• Capacity set too high on a half-hourly site, so you pay for capacity you never use.

What are the back-billing rules for businesses?

If you’re a microbusiness, your supplier generally can’t bill you for energy used, or standing charges, from more than 12 months ago unless it has billed you for that amount before. Ofgem introduced the rule for microbusinesses in November 2018.

The limit doesn’t apply if you’ve behaved unreasonably. The Energy Ombudsman gives examples such as blocking access to your meter, ignoring requests for payment or stealing energy.

Some protections were extended to small businesses from 19 December 2024, including access to the Energy Ombudsman and complaints-handling standards. The 12-month back-billing limit wasn’t among the licence conditions listed in Ofgem’s notice, and the Energy Ombudsman describes the back-billing rules as applying to domestic and microbusiness customers. If you’re a larger business, check your contract terms. Our microbusiness energy guide explains who counts as a microbusiness.

What should you do if your bill looks wrong?

1. Take a meter reading and a dated photo of the meter.
2. Check the basics: MPAN or MPRN, serial number, dates, readings and rates against your contract.
3. Ask your supplier to explain the bill. Suppliers must explain how a bill was worked out if you ask, and must give you your historical consumption.
4. Make a formal complaint if it isn’t resolved. Keep copies of everything.
5. Go to the Energy Ombudsman if you’re a micro or small business and the complaint is still unresolved.

Our business energy complaints guide explains each step.

Frequently asked questions