If you are new to the business industry, you first need to look for a good energy supplier and contract that is ideal for your business. It would help if you looked for the best deal on energy bills to save yourself from high costs, wastage of time, and headaches. But before that, you need to understand what your business gas bill is. Let’s have a look.
What goes into your gas bill?
There are a lot of different components that make up your total bill. They can be classified broadly into transportation costs, government charges, metering costs, and cost of management.
Transportation costs
To supply your building and business with gas, the gas must be transported across the country to different areas and sectors. This is why transportation costs have to be paid by the consumers. Transportation costs can be further broken down into four minor costs, including making space and capacity in the system operation for each consumer, cost of unidentified gas consumption, and shaped charges. Since CNG cease trading, there might be an increase in transportation costs.
Metering costs
The metering costs written on your gas bill can be broken down into four minor charges, as mentioned below.
1) Meter rental costs
You or your gas provider does not own the gas meters located outside your building’s wall. All the gas meters are owned by a meter management company that charges you a certain fee to cover their cost of providing you with the meter and maintaining it.
2) AMR (Automated Meter reading)
If you have installed an AMR device, you will need to pay a rental charge for it. The meter companies can cover the cost of providing you with automated readings and maintaining the communication system to measure and attain those automated readings.
3) Meter read agency fee
The meter read agency has the duty of reading and checking your meter regularly. They come to your building to check the reading on the meter, inspect the meter for any faults and the need for repair and maintenance. Your bill includes the amount of fee the meter read agency charges for carrying out this duty.
Government charges and fee
The business gas bill that you receive also contains two very important government charges.
1) Climate change agency
The climate change agency and company were put in place to encourage energy-efficient working and reduce overall negative effects on the environment through reducing emissions. Your energy bill includes an environmental tax fee on gas consumed by businesses.
The climate change fee applies to commercial, agricultural, industrial, and public service businesses. It is charged on taxable commodities for lighting, heating, and power reasons. Every business is charged this fee on a per kilowatt-per-hour basis.
2) VAT
VAT is a government tax that is charged at a rate of 20%. If a business uses less than 4,398 kWh per hour, it will be charged less than 20%. Some organizations, such as charities, might also be exempted from the fixed rate of 20%.
So finally I hope you were able to understand how your gas bills are calculated. Let us know your thoughts in the comments.
