Business gas and electricity for your pub

posted on 13/06/2014 00:00:00 by James McAllister

How do your pub's energy contracts work?

 

With lighting, refrigeration, heating systems and all manner of electrical appliances running on a daily basis, pubs consume relatively high levels of energy.

If you own or run a pub, it’s likely you’ll have noticed this on your bills - and the money you have to spend on all that energy inevitably puts a dent in your bottom line. That’s why it’s sensible to ensure you’re not paying over the odds for your gas or electricity, so that you can maximise your margins and put the savings to good use elsewhere.

The first step to reducing your pub’s gas and electricity bills is to make sure you’ve got an energy contract with fair rates that are suited to your pub’s consumption habits.

Business gas and electricity contracts

Small businesses are typically billed based on prices defined in a fixed term energy contract. These contracts will specify a business price per unit (kWh) that you’ll pay for the gas or electricity you use during the duration of your deal – as well as a daily standing charge for each day your supplier provides you with energy.

Depending on the length of your pub’s contract, the business gas prices you’ll pay could be fixed for anywhere between one and four years, so it’s important to ensure you’re getting a good deal for your energy. However, remember that, while the price you’ll pay per kWh is fixed, the total amount of your average pub gas and electricity bills will fluctuate depending on how much energy you use.

When your pub is nearing the end of its current gas or electricity contract, if you do not terminate the deal and negotiate a new one, you’ll automatically be placed on a more expensive standard rate by your supplier.

A better energy deal

The most efficient way to get a better business energy deal for your pub is to ensure that you switch to a more competitive deal that suits your business’s needs – and you can typically arrange this switch six months before your current deal expires. That way you’ll avoid paying your supplier’s more expensive standard rates when your existing contract comes to an end, enabling you to get a fair deal and minimise your gas or electricity bills.

Energy bills for your pub

The majority of pub energy costs displayed on your bill are based on your usage. However, there are also charges for government-imposed taxes and operational costs that your energy provider charges. A small or medium-sized business’s energy bill typically includes the following costs:

  • Wholesale costs: This is the largest component of your bill. It is the price at which energy retailers buy electricity and gas from the energy market - and how much they charge you for it.
  • Network costs: These include the cost of maintaining and operating the gas pipes and electricity wires which deliver energy to you.
  • Operational costs: These are the costs associated with running the retail energy business.
  • Climate Change Levy (CCL): This is the government-imposed tax designed to encourage reduction in gas emissions and greater energy efficiency. You may be exempted this levy if your daily electricity consumption is under 33kWh or your daily gas consumption is under 145kWh.
  • Value Added Tax (VAT): This is a form of consumption tax on goods and services.

James McAllister

James is an online content creator at Make It Cheaper. Having previously created a variety of content for a number of websites and media outlets, James focuses on making it easy for SME owners to find interesting and engaging content - as well as useful guides and online tools.You can email James at james.mcallister@makeitcheaper.com

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