As one of the biggest expenses for businesses, your energy usage should be something you pay close attention to. However, with your attention already stretched thin, for many business owners it can be hard to understand the different metrics in your monthly bill.
Understanding the figures in your energy bill will help you make decisions regarding your energy usage, and give you an overview of how your business is using energy. Having this information can potentially help you save money and recognise if your current energy plan is best suited to your business.
Here are some key metrics to look out for on your energy bills and what they mean.
When reviewing your usage charges, understanding how your provider is measuring your energy usage will help you understand how the cost is being determined.
Energy is measured in watt (w) units, with each appliance that runs on electricity having its own watt rating to reflect its usage. So, if an appliance has an average watt rating of 100w, these means that it would use 100 watt-hours if it is run for an hour.
Your energy usage is billed in kilowatt-hours (kWh), with 1 kilowatt-hour equaling 1,000 watt-hours of electricity. To calculate your usage cost, the watt rating of each appliance is multiplied by the number of hours used and then divided by 1,000. This is the payable amount that will appear on your bill under usage charges and shows the average kilowatt hours of electricity used each day.
Service to Property charge
Your service to property charge, also sometimes called a supply charge, is a fixed rate applied to your energy bill. This is an additional charge that you will receive with every bill. It shows your daily supply charge for the use of electricity.
This charge covers the daily cost for your energy provider to supply electricity to the property listed on your bill. Unlike your usage charge, this charge is not dependent on the amount of energy used.
Peak usage charge
Another metric that may appear on your energy bill is a peak usage charge, also sometimes called a demand charge.
There are certain instances in which everyone is running high levels of energy at the same time. This often happens during summer and winter, with everyone blasting their cooling or heating systems for long periods of time. Due to increased demand for electricity during these peak times, you may find a peak usage charge on your bill. This measures the maximum amount of energy that may be used within this peak period and then charges you at that amount each day for the duration of that billing period.
This metric is an important one to look out for, as by understanding these peak times you can take measures to lower your energy usage and therefore lower the cost, such as not running so many appliances during those peak times.
Understand your energy bill
The cost of your energy usage can depend on a number of different factors, including the area you live in, amount of energy usage and usage during peak periods. Understanding how much energy you are using and what it is costing you will help you manage your businesses energy usage and ensure your current plan is meeting your needs.
If you’re ever unsure about what certain metrics on your energy bill mean, don’t hesitate to contact your energy provider.