How Do You Calculate Utility Costs For A Business?
What are business utility costs? In business, the term “utility” is typically used to refer to the cost of using a service or product that helps in producing goods or services. These costs can vary significantly based on your business and location.
The following article will provide a brief overview of how business owners can estimate their utility costs for their businesses. When calculating business utility costs, the first step is determining what type of utilities you need for your business. You may need water, business gas, business electricity, or another form of energy source depending on the industry you operate in.
How do I work out my energy costs?
Firstly, you must know what type of tariff you are on and whether you pay a single rate or various time of use rates. Generally, this is broken into a standing charge and either one or a combination of unit rates – Day Rate, Night Rate or Weekend Rate.
Standing charge – A fixed charge, which is normally paid in pence per day but can be in pounds per month/quarter. The standing charge on your business gas and electricity bill is the amount you pay each month to cover the cost of physically supplying energy to your premises, and keeping it connected to the energy network.
Day Rate – Usually what energy (kWh) you used between the hours of 7am – 7pm
Night Rate – Usually what energy (kWh) you used between the hours of 7pm – 7am
Weekend Rate – Usually what energy (kWh) you used at the weekend (Saturday & Sunday)
How does business electricity pricing work?
Business electricity prices and plans are calculated and set up differently to domestic ones.
The first thing to remember is that you don’t have to use the same supplier for both your business electricity and gas supply – although you may be able to use this to secure a better price.
Business electricity rates are based on your business size and electricity consumption. It may be calculated on a fixed or a variable rate tariff and will be based on a unit rate per kWh.
There may also be a range of additional charges, particularly If you have a half-hourly meter. There are additional charges that apply, such as a capacity charge, displayed as KVA on your bill, this may or may not be set correctly and would need checking you are not paying for excess capacity or being penalised if it is set too low.
The range of different charging plans is extensive and with the current energy crisis we have seen some suppliers changing the price mid term – like most things the devil is in the detail and the T&C’s are often murky and lets be honest who has the time to read them? Probably not you but this is an aspect that Jonstar can take care of. We provide a free and no obligation analysis so you can see exactly what you pay and when, helping to budget and reduce costs. Get in touch with us today for more information.
