Energy suppliers sometimes use abbreviations and terms that can be confusing to the customers, so here is a basic list of commonly used abbreviations to give you a guide when discussing your requirements with suppliers and brokers.
Agreed Read Dispute
This is a process designed to resolve issues that arise if closing and opening meter readings do not match-up during a switch or change of tenancy.
Automated Meter Reading
These readings can be obtained from Smart Meters, providing people with instant and accurate data relating to commercial energy consumption.
AQ or AAQ
Annual Quantity or Annual Agreed Quantity
An estimate of future commercial gas consumption, as calculated by Transco, the distribution network.
Authorised Supply Capacity
Only Maximum Demand customers need to be concerned with this term, which refers to the amount of commercial electricity allowed for running industrial equipment.
Climate Change Levy
This is an environmental energy tax and it’s been part of business energy bills since 2001. It was introduced to try to help reduce greenhouse gas emissions. The Climate Change Levy (CCL) is made up of the main rates and the carbon price support rates. The main rates of the CCL apply to gas, electricity and solid fuels and should be listed on your energy bill.
How much you pay in CCL charges depends on which sector your business is in, whether that’s industrial, commercial or public services. But if you only use a small amount of energy then you won’t pay CCL charges. You will also be exempt if you are a charity.
Energy intensive businesses can enter into a climate change agreement with the Environment Agency to get a reduction on CCL rates.
Department of Energy and Climate Change
A government department created in 2008. Its purpose is to work for secure, affordable and efficient energy.
Deemed and out of contract rates
You may be asked when you’re comparing energy prices if you are on “deemed contract rates” or “out of contract rates”.
Deemed contract rates refer to when a customer moves into new premises and simply uses the existing energy supply. It’s when the customer isn’t in contract with the existing supplier. They are called deemed rates because the consumer is deemed to have taken out a contract with the existing provider.
Out of contract rates refer to when a customer goes past the contract end date and has not agreed or accepted the renewal prices from the supplier. If this happens the supplier charges out of contract rates. (Variable Tariff)
Both deemed contract rates and out of contract rates are more expensive than if you are in an agreed contract and so you shouldn’t be on these rates for longer than is necessary.
Electricity Central Online Enquiry Service
The service provided by electricity suppliers and distribution companies that notifies the appropriate bodies when a user switches commercial electricity provider.
The name used to metres with a ’00’ profile number that are used by energy-intensive businesses. These firms’ average peak electricity demand will have been greater than 100kW in any three months of the preceding year.
The unit of power related to running industrial machinery.
A standard unit of measurement on which business electricity charges are based.
Levy Exemption Certificate
These certificates are issued by Ofgem and exempt the holder from the Climate Change Levy, meaning they will not have to pay the charge on top of standard business electricity costs.
Liquefied Natural Gas
Gas that has been cooled and condensed into a liquid – a process that makes it easier to transport and store.
These meter profiles begin with either 05, 06, 07 or 08 and are usually on their own tariff. The term relates to the highest expected load drawn from the network by intensive commercial electricity users.
Meter Point Administration Number
This is sometimes referred to as a Supplier Number or S Number, and is the unique number found on a business electricity bill. The first two digits in the number display the meter profile – 03 or 04 for a small business, 05 to 08 for maximum demand users and 00 for Half-Hourly.
Meter Point Reference
A unique number used to identify a commercial gas supply. These are found on a bill and are ten digits long.
Meter Serial Number
The unique number that identifies a meter which is usually displayed on the front of most metres.
Office of Gas and Electricity Markets
An organisation established to regulate and promote competition in a deregulated energy industry.
This is the HM Revenue and Customs form that enables users to claim exemption or discount on the Climate Change Levy.
Renewable Obligation Certificate
Contains details of exactly how a unit of renewable electricity is produced, who by and who bought the electricity.
The standing charge is a fixed daily cost. It’s paid on top of your consumption charges. So no matter how much gas or electricity you consume you’ll pay the same amount to cover your standing charge.
The standing charge covers things like transporting your energy and looking after your meter.
The amount you pay in standing charges depends on where your business is located. It’s something everyone has to pay whether you’re a domestic or business consumer. However, some gas tariffs don’t have a standing charge but the unit rates will reflect this.
Your energy supplier is charged by the National Grid or the local distributor who owns the pipes and wires which transport energy around the country. It means that if your business is based in a rural area the standing charge may be higher than if it was based in a town or city because it will cost more to transport energy into the countryside. It may also cost more to repair damaged pipes or wires in a rural setting.
The Unit Rate is the price you pay per unit of gas or electricity used – your consumption. Depending on what type of meter you have may mean you have several different rates for electricity. For example, you may have day, night and weekend rates. The unit rate and the standing charge are the prices you need to look at.
If your business consumes less than 33kWh of electricity or less than 145kWh of gas per day then you may be eligible to pay VAT at just 5%. This also applies to charities and non-profit organisations such as churches. However, if you’re not eligible for this lower rate of VAT then you’ll pay the current rate of 20%.