Understanding Your Energy Bill

TCR Banding: A Powerful but Overlooked Way to Lower Energy Costs for UK Businesses As UK business energy prices continue to fluctuate at historically high levels, companies across the country are under increasing pressure to find reliable ways to lower energy costs . With government levies, non-commodity charges, and market instability all contributing to rising bills, businesses must now look beyond traditional energy-saving methods to manage their expenses. In previous articles we looked at how to lower kVA charges , and published a guide on how to lower business energy costs. One such method gaining attention is TCR Banding - a relatively lesser-known, yet impactful solution for reducing DUoS and TNUoS charges. What Is TCR Banding? TCR Banding is part of the Targeted Charging Review (TCR), a reform introduced by Ofgem in 2022. Its goal is to ensure a fairer, more consistent system for charging UK electricity users for their share of the grid's maintenance costs -- specifically the Transmission Use of System (TUoS) and Distribution Use of System (DUoS) charges. Instead of charges being based on when energy is used (which could be manipulated by large users), charges are now fixed and based on how much energy is typically consumed or the agreed capacity. This is where TCR Bands come into play. This leads many businesses ask what is their TCR banding? As, without having previously discussed this with your DNO , you could be in the dark regarding exactly which TCR band your sites are in. What Are TCR Bands? TCR Bands categorise electricity meters into different levels based on their voltage type and agreed kVA capacity. These bands determine the fixed DUoS and TUoS charges applied to a business's energy bill. For Low Voltage (LV) Half-Hourly Meters: Band 1: 0 – 80 kVA Band 2: 81 – 150 kVA Band 3: 151 – 231 kVA Band 4: 232 kVA and above For High Voltage (HV) Half-Hourly Meters: Band 1: 0 – 422 kVA Band 2: 423 – 1,000 kVA Band 3: 1,001 – 1,800 kVA Band 4: 1,801 kVA and above The higher your TCR band, the more you'll pay in fixed DUoS and TUoS charges, making it essential for UK businesses to ensure their banding is correctly assigned. Who Assigns Your TCR Band? Your Distribution Network Operator (DNO) is responsible for assigning your TCR Band. DNOs are regional companies that manage the physical infrastructure delivering electricity to your site. They’re the ones compensated through DUoS and TUoS charges shown on your business energy invoice. The initial banding is typically based on your historic energy consumption and agreed capacity, but each DNO may have slightly different processes for determining and reviewing your band.

The Climate Change Levy (CCL) -- a tax on business energy use to encourage environmental responsibility -- is seeing an increase in rates for gas and solid fuels starting April 1, 2024. This is designed to help with the government's goal of achieving net zero emissions by 2050. What is the CCL? The CCL is an environmental tax added to the electricity and gas bills of businesses and public sector organizations. It incentivises reduced greenhouse gas emissions and improved energy efficiency. There are two main CCL rates: Main Rate: Applies to all businesses in relevant sectors and varies depending on energy usage. Carbon Price Support Rate: Applies to electricity generators and combined heat and power station operators (not changing in 2024). What's Changing? Main Rate Increase: The CCL rate for gas is rising from 0.672 pence per kilowatt-hour (p/kWh) to 0.775 p/kWh, matching the existing rate for electricity. This increase aims to create a level playing field between these energy sources and encourage businesses to be more efficient with both. Solid Fuel Rate Increase: The rate for other solid fuels is also rising proportionally to gas. Discount Rate Adjustments: Businesses participating in Climate Change Agreements (CCAs) receive discounts on the CCL in exchange for meeting energy efficiency targets. These discounts are being adjusted to reflect the main rate increase, ensuring CCA participants don't pay more tax. LPG Rate Frozen: The CCL rate for Liquefied Petroleum Gas (LPG) remains unchanged. Impact on Businesses This CCL change will lead to higher energy bills for businesses that rely on gas and solid fuels. To mitigate the financial impact, businesses can explore options such as: Energy Efficiency Audits: Identify areas of energy overuse and implement efficiency measures like LED lighting or improved insulation. Renewable Energy Solutions: Consider switching to renewable energy sources like solar panels to reduce reliance on taxed fuels. Ensuring they have the most competitive rates: By comparing all rates available or using a broker to negotiate on their behalf, businesses can make sure they are not over-paying on their unit rates. The CCL is intended to be a nudge towards environmental responsibility, encouraging businesses to adopt cleaner energy practices. By taking steps to improve energy efficiency, businesses can not only reduce their environmental footprint but also potentially offset the financial impact of the CCL increase. If your business requires advice on how to lower energy bills or create a reduction in carbon emissions, contact us today to see how SeeMore Energy can help you.

Understanding Your Energy Bill: Environmental Charges Environmental Charges In 2019, the UK government set a target to achieve net zero carbon emissions by 2050. In order to meet this target, numerous environmental and green energy schemes were introduced to encourage households and businesses to switch to renewable energy sources and reduce their carbon footprint. These schemes are funded through charges that are included in electricity bills. Here is what each charge means: Feed-in Tariff (FIT) The Feed-in Tariff (FIT) scheme is designed to encourage households and businesses to generate their own renewable electricity, such as solar or wind power, by offering them a payment for every unit of electricity they generated. The FIT payments are made up of two parts: a generation tariff and an export tariff. The generation tariff paid the owner of the renewable energy system for every unit of electricity they generated, regardless of whether they used it themselves or exported it to the grid. The export tariff paid the owner of the system for every unit of electricity they exported to the grid. Those who don’t generate energy pay for the scheme through the FIT charge. This surcharge is currently between 0.30-0.35p per kWh of electricity consumed. This may vary slightly between suppliers, but all suppliers are obligated to include this charge. Renewables Obligation (RO) The Renewables Obligation (RO) scheme was introduced in April 2002 and was designed to encourage energy suppliers to source a specified percentage of their electricity from renewable sources. Under the RO scheme, energy suppliers were required to buy Renewable Obligation Certificates (ROCs) from renewable energy generators. The number of ROCs required depended on the size of the supplier and the amount of electricity they supplied. The cost of the RO scheme was funded through a levy on electricity bills. The amount charged can vary depending on the energy supplier but from April 2022-March 2023 the charges were between £25.96-£27.52 / MWh. Climate Change Levy (CCL) The Climate Change Levy (CCL) was introduced in April 2001 and is paid by most businesses and public sector bodies that use energy. The CCL is a tax on energy use that is intended to encourage organisations to reduce their carbon emissions. The CCL is charged on the units of energy used, such as gas and electricity, and is charged at a rate of £0.00775/KWh of electricity used, or £0.00672 per KWh of natural gas used. Unlike other charges on your bill, the CCL is not set by the supplier but by the government and will be billed at the same rate regardless of who your supplier is. The money raised from the CCL is used for energy efficiency and renewable energy projects. A part of the revenue is also used to compensate energy-intensive industries for the extra costs they face as a result of the CCL. There are exemptions from the main rate of CCL depending on how the supply is used, where it is used, and if consumption doesn’t meet De minimis limits. To find out if you are eligible to be exempt from any CCL charges or to find out more about your bills, don’t hesitate to contact Seemore Energy for more information and guidance.

Understanding Your Energy Bills: Unit Rates What are Unit rates? Unit rates are the price you pay for each kilowatt hour (kWh) of gas or electricity you use. They are typically the largest charge on your energy bill and are directly related to how much energy you consume. Unit rates vary from supplier-to-supplier, and they will normally remain fixed for the duration of a contract. However, when comparing the market to find a deal, they will vary daily. Meaning the timing of signing your contract can greatly impact the rates you pay for the duration of the contract. Which factors affect the unit rates a supplier will offer? Unit rates are typically influenced by a number of factors, including: The cost of fuel: The cost of gas and electricity is linked to the global price of fossil fuels, such as oil and gas. The UK relies heavily on gas, even for electricity production, so fluctuations in wholesale gas markets can have a large impact on the unit rates being offered. The cost of infrastructure: The cost of building and maintaining the energy grid is also passed on to consumers through unit rates. The perceived risk/volatility in markets: During times of perceived higher volatility, suppliers will look to price in a larger cushion between the wholesale prices they are paying and the unit prices they offer. This is designed to limit their risk should the wholesale prices rise significantly. The supplier's profit margin: Energy suppliers make a profit on the energy they sell, which is also factored into unit rates. With different suppliers having different approaches to the margins they apply to each customer. How to reduce your unit rates In a fixed contract the unit rate will remain the same for the contract’s duration. However, there are a few ways to ensure you get the best available unit rates when signing your contract: Comparing as many suppliers as possible: Energy suppliers compete for customers, so it is possible to find a better deal by switching to a different supplier. By shopping around and completing a full-market comparison , you can see which supplier is offering the best rates for the length of contract you desire. Timing when to renegotiate your contract: You can typically sign your next contract up to 6 months before the end of your existing contract. By paying attention to the market, existing trends, and which variables are likely to influence future prices, you can try to sign your contract at the most opportune time. For analysis on how the market is moving and the key factors impacting price, sign up for our free monthly market updates and receive advice on how the markets are moving: https://www.seemoreenergy.co.uk/newsletter Flexible Contracts: With a flex contract you don’t sign a fixed unit rate, but instead can purchase your energy for upcoming months and seasons. With this type of contract you often avoid the risk premiums included in fixed-price contracts . If you would like more information on any aspect of your energy bills or would like us to conduct a free full-market comparison on your behalf, get in touch and we’ll happily work to assist with your business energy needs. We aim to provide the confidence and accountability that allows you to revert back to the core focus and operations needed in other areas of the organisation. To learn more about how I can help, feel free to contact me at adam@seemoreenergy.co.uk or click on contact for one of our skilled team members to get in touch.

What are the use of system charges? On your electricity bill, you may notice three "Use of System" charges listed among the various fees and costs. These are: Distribution use of system (DUOS) Transmission use of system (TUOS) Balancing service use of system (BSUoS) In this article we will explain what they are and why they are charged. DUOS Distribution use of system charges are applied by the local distribution company for using their network to transport electricity from the national grid to the user. They can include a DUOS standing charge which covers the cost of maintaining and operating the local distribution network. This is a fixed charge and is based on the size of the connection to the network. There are also DUOS unit charges relating to the amount of electricity consumed. These unit charges can come in red, amber, and green depending on the time of day and reflect the demand on the local area network. During times of high demand the charge will be classed as red, which is the highest of the 3 unit costs. During times of low demand the charge will be green, the lowest of the 3 unit charges. Amber charges fall in between red and green, being applied to periods of medium demand. The amounts charged for these can vary depending on the type of meter, distance from the connection point, and the available supply capacity. On average, red charges are 50 times more than amber charges, and 450 times more than green charges. These charges are designed to encourage users to consume less electricity during peak hours and encourage use during times when there is less demand on the grid. Can DUOS charges be reduced? One way to reduce costs is to monitor when energy is being used and – where possible – try to conduct energy-intensive activities outside of peak demand hours. By understanding when you normally use the most electricity you can begin to assess which activities can take place during hours when the demand across the grid is less intense. For those with half-hourly meters, this can be possible if you have an energy monitoring service -- such as the one included with our bill validation portal. Clearly seeing how much you consume at different times of the day, and different days of the week, can offer valuable insight into your consumption patterns.

Understanding kVA Capacity Charges and How to Reduce Your UK Electricity Capacity Charges kVA capacity charges are one of the least understood parts of a UK business electricity bill, yet they can represent a significant ongoing cost for businesses with half-hourly electricity supplies. This guide explains what electricity capacity charges are, how they are calculated, and how your business may be able to reduce kVA charges and lower its electricity costs. What are kVA Capacity Charges? Imagine your electricity supply like a motorway. Your kVA capacity (also known as your Agreed Supply Capacity ) represents the width of the lane allocated to your business. This reserved capacity ensures you have enough electricity available to meet your maximum demand whenever you need it. Your local Distribution Network Operator (DNO) reserves this capacity for your premises, and you pay a daily capacity charge whether or not you fully use it. These charges form part of your Distribution Use of System (DUoS) charges and appear separately on many business electricity bills. Example A manufacturing business has an Agreed Supply Capacity of 200 kVA to ensure there is sufficient power available during periods of peak demand. The local Distribution Network Operator (DNO) reserves this capacity for the site and applies a daily capacity charge. Assuming the current charge is 3.18p per kVA per day , the calculation would be: 200 kVA × 3.18p = 636p per day (£6.36) Over the course of a year, this amounts to: £6.36 × 365 days = £2,321.40 per year If, after reviewing its half-hourly electricity data, the business discovers its maximum demand has never exceeded 140 kVA , it may be able to reduce its agreed capacity from 200 kVA to 150 kVA while still maintaining a safe margin. The revised annual charge would be:  £1,741.05 per year Potential annual saving: £580.35 How to Reduce kVA Capacity Charges Many businesses are paying for more electrical capacity than they actually need. If your agreed supply capacity is significantly higher than your actual maximum demand, you may be able to reduce your electricity capacity charges without affecting your operations. Some ways to achieve this include: Monitor your electricity consumption – Analyse your meter readings and half-hourly (HH) data to identify periods of high demand. Spread your electrical load – Avoid running multiple high-power machines simultaneously where possible. Shift non-essential processes – Schedule energy-intensive activities outside of peak operating periods. Upgrade equipment – Modern, energy-efficient equipment often requires lower peak demand, helping reduce your required capacity. These measures not only help reduce kVA charges, but can also improve overall energy efficiency. Lowering Your kVA Allowance If your electricity usage consistently remains below your current agreed capacity, you can request a reduction in your Agreed Supply Capacity from your DNO. Reducing your agreed capacity is normally an administrative process and, in most cases, does not require physical work on the electricity network, making it a free service. However, it is important to ensure your future electricity requirements have been considered. If your business later needs additional capacity, increasing your agreed supply may involve network studies or connection charges. For this reason, it's advisable to review historical electricity data and consider any future expansion plans before requesting a reduction. Frequently Asked Questions What are kVA charges on an electricity bill? kVA charges are daily charges for the amount of electrical capacity reserved for your premises. They are separate from the cost of the electricity you consume. Can I reduce my kVA capacity charges? Yes. If your business consistently uses less electricity than your agreed capacity allows, you may be able to reduce your agreed supply capacity and lower your ongoing electricity capacity charges. Are there ways to make money from our capacity? Yes. More businesses are looking into using their capacity to make additional income by selling capacity back to the market. A Free kVA Capacity Review? If you'd like to find out whether you're paying too much in kVA capacity charges, we can carry out a free capacity review using your electricity data. We'll assess your current agreed supply capacity, review your maximum demand and advise whether reducing your electricity capacity charges is likely to save your business money. Contact us today to arrange your free review.

Understanding Meter Reads and Avoiding Estimated Bills In today's world of rising energy costs, keeping a close eye on your household bills is more important than ever. One way to ensure you're paying for the exact amount of energy you use is by understanding meter reads.  What is a Meter Read? A meter read is simply the recorded measurement of your energy consumption, typically electricity or gas. This measurement is taken by a representative from your energy supplier or captured electronically by a smart meter. Traditional meters have dials with numbers that rotate as you use energy, while smart meters display the reading digitally. Taking a Meter Read Yourself While many suppliers now rely on smart meters for automatic readings, some households might still have traditional meters. There are various types of meters, and how to take the read can vary between them. We have published a free guide for how to take meter reads covering various meter types. If you would like a copy of this guide, leave your email address in the form at the bottom of this page and we will send you a free copy.

EII Support Levy UK: Understanding the Charge and Exemptions for Businesses The EII Support Levy UK is a new charge impacting energy bills for many UK businesses. Introduced in April 2025, this levy funds the Exemption Scheme for Energy Intensive Industries (EIIs) , ensuring UK businesses with high energy costs remain competitive internationally. This guide explains what is EII Support Levy energy bills , who needs to pay it, and how to navigate EII exemption UK businesses to manage energy costs effectively. What Is The EII Support Levy? The EII Support Levy is a government-introduced charge added to non-domestic energy bills to support the EII Exemption Scheme . This scheme reduces energy costs for businesses classified as Energy Intensive Industries (EIIs) , identified by specific SIC codes. Non-EII businesses bear the cost of this levy to offset exemptions for EIIs, helping energy-intensive sectors stay competitive in global markets. Which businesses need to pay it? All non-domestic UK energy users without an eligible SIC code classifying them as an Energy Intensive Industry must pay the EII Support Levy. The application of the charge varies by supplier, with some still clarifying their implementation methods. Businesses should confirm with their supplier how the levy is applied to their EII Support Levy energy bills.

Back Billing: Understanding OFGEM Rules and Avoiding Unexpected Energy Costs in the UK Recently we have been seeing an increase in suppliers issuing invoices for charges that are more than 12 months old. Back billing can catch UK businesses and households by surprise, leading to unexpected energy costs. This guide explains what is back billing , the OFGEM back billing rule , and practical steps to avoid energy back bills. What Is a Back Bill? Back billing occurs when an energy supplier issues an invoice for energy used but not previously billed accurately. This could result from missed meter readings , estimated charges, or issues with consumption data. These bills can cover usage from weeks, months, or even over a year, leading to significant unexpected costs for UK energy users. The 12-Month Back-Billing Rule The OFGEM back billing rule protects domestic energy users and microbusinesses in the UK. Under OFGEM regulations, suppliers cannot charge for energy used more than 12 months ago if: You never received an accurate bill for that period, even after requesting one. You were not informed of charges through a statement of account. Your Direct Debit was set too low to cover actual usage, and the supplier failed to adjust it.  This OFGEM back billing rule ensures suppliers cannot unfairly burden customers with old charges due to their own errors. Exceptions to the OFGEM Back Billing Rule You may be liable for charges older than 12 months if the billing issue is your fault. For instance, if you deliberately prevented meter access or ignored billing requests, suppliers can back-bill for up to six years. Understanding these exceptions can be key to managing back billing on UK energy invoices.