Bill Validation – What is it and why is it necessary?

Do you know if you are being charged correctly? One of the things that could save you money on your energy bills is also one of the simplest.
Details from a poll conducted by One Poll, found that 83% of businesses had fallen short of predicted growth targets due to business energy price rises, with 43% expected to miss targets for 2013.

It’s a worrying thought, with the National Audit Office (NAO) expecting energy prices to exceed inflation until 2030.

With data management companies being big consumers of energy, it’s a worrying thought for an ever growing business sector.

It’s sometimes difficult to tell whether you're being charged correctly and accurately.

Invoices are usually based on estimated reads which aren’t always as accurate when compared to actual meter readings, this can cause estimates to be higher than what you should be paying. It’s estimated that on average, some organisations can overpay by between 5 – 15% every year.
A way to reduce the risk of overcharging is to take regular meter readings and check the difference compared to the bills you receive; whether this be monthly or quarterly. But how do you know what parts of the bill are relevant?

Most bills will have all the charges from rate, standing charge, capacity charge, KVARH, CCL, VAT, FiT & RO included, these are based on what contract you have and aren’t always clear. This can make working out what you’re being charged, and whether it’s correct, a difficult task. So what do these charges cover?

Rate: is the cost of the raw energy you’re consuming and is the rate which your supplier will quote.

Standing charge: is a fixed cost associated with your energy supply such as meter reading, maintenance and the cost of keeping you connected to the network.

Capacity charge: is the Available Supply Capacity (ASC), this refers to the amount of electricity that the Distribution Network Operator (DNO) is required to make available for your site. Essentially, it is the maximum electricity you can draw from the grid at any one moment.

KVARH: stands for Kilo Volt Amps Reactive Hours and is best described as a charge for the poor use of energy which can come down to machinery or the use of energy that is inefficient. This takes away from the areas supply which the company charges as KVARH.

CCL: also known as Climate Change Levy is added to your bill as a tax intended to maintain a clear price for carbon emissions, encouraging the electricity generation industry to invest in low carbon emission technology.

VAT: is the tax rate you pay on your energy bill and is at 20% - unless you receive VAT exemption.

FiT & RO: stands for Feed-In Tariff scheme and Renewable Obligation, this was introduced to encourage people and businesses to introduce other means of energy production such as turbines and solar panels. If you are producing more than you use, the government will reimburse you for the amount you feed back into the system. RO is where the energy suppliers are encouraged to find and offer a renewable source of energy and supply this where possible.

Another time saving and easier alternative is to use a service called Bill Validation.

Particular energy consultancies, like CUB (UK) Ltd, will have this service available to new and existing customers and it can make trawling through bills and taking meter readings an unnecessary task, and it gives you time and piece of mind.

We then give a monthly or quarterly report of usage and then begin to action whether you are due a return on your bills, by getting in touch with your supplier.’

CUB (UK) Ltd have a team of trained staff who can talk you through the procedure. If you want further details you can contact them via phone 01354 606848 or email info@c-u-b.com.