Understanding Your Electricity Bill

What does your electricity bill include?

• Unit rate - the price you pay per kWh used

• Standing charge - a daily fixed cost for being connected to the network

• Consumption - actual or estimated usage over the billing period

• MPAN (Meter Point Administration Number) - the unique ID for your supply point

• VAT & Climate Change Levy (CCL) - government taxes applied to business energy

Why is my bill sometimes estimated?
If you don’t provide meter readings, suppliers may estimate your usage. This can result in over- or under-charging. Regular meter readings (or a smart meter) help keep bills accurate.

What additional charges might appear?
Larger sites or half-hourly metered supplies may also see:

• Transmission Fixed Charge - National Grid cost for moving electricity across the UK network

• Distribution Fixed Charge - covers local network delivery (via your Distribution Network Operator)

• Capacity Charge - charge for the Maximum Import Capacity (MIC) your site has agreed with the DNO

• Excess Capacity Charge - applied if you exceed your agreed MIC

• Reactive Capacity Charge - penalty if your site uses electricity inefficiently (e.g. from motors, refrigeration, lighting)

• Paper Bill Charge - extra fee if you choose paper over e-billing

• Climate Change Levy (CCL) - tax per kWh, with exemptions for charities, low users, or Climate Change Agreements (CCA)

How can I check my bill is correct?

• Match your consumption with actual meter readings

• Confirm the MPAN matches your premises

• Ensure VAT and CCL are correctly applied