Energy Jargon-Buster

MPAN – Meter Point Administration Number, this is the individual, unique reference code used to identify each electricity meter – it is displayed as a rectangle with a large “S” on the left, followed by two lines of numbers. It is sometimes called a “supply number” or an “S number”. Example below:

MPR(N) – Meter Point Reference Number, this is the individual, unique reference code used to identify each gas meter – It is sometimes called an “M number”.

COT – Change of Tenancy, this is when a business moves into (or leaves existing) premises. Final or Start meter readings need to be submitted to current supplier, and if a business is moving into a premises – a new supply contract is often needed to be negotiated.

CCL – Climate Change Levy is a government tax applied to energy use. It is designed to encourage businesses to be more energy efficient. Some businesses with applicable processes/a certain level of domestic use can apply for a CCL exemption.

VAT – VAT is normally charged at 20% on business energy. However, in certain circumstances a business energy customer can qualify for a reduce VAT rating and only need to pay the domestic rate of 5%.

The circumstances that give rise to this are:

– Energy for charity non-business qualifying use
– Energy where the amount supplied does not exceed the domestic qualifying use de minimis limits
– Energy with at least 60% being eligible for qualifying use

Qualifying use means ‘Domestic use’ or ‘Charity non-business use’.

FIT – The Feed-in Tariff is a government scheme that pays homeowners and businesses (subsidy) to generate and export their own electricity, from renewable or low-carbon sources. Feed in Tariff applies to small scale renewables – and the money is generated as a tax on all business energy bills.

RO – Renewables Obligation is a government scheme that pays businesses (subsidy) to generate and export their own electricity, from renewable or low-carbon sources. Renewables Obligation applies to large scale renewables – and the money is generated as a tax on all business energy bills.

CFD – A new levy on energy bills, known as Contracts for Difference (CfDs) is designed to replace the Renewables Obligation (RO). However, Renewables Obligation will continue to be levied until 2037 as the 20-year lifespan of that scheme phases out, whilst CFD’s from 2017 are designed to replace the Renewables Obligation for any new plant.

KWH – Kilowatt Hour (KWH), one unit of energy (electricity or gas).

Consumption – Sometimes called AQ (Annual Quantity) or AC (Annual Consumption) this is the amount of energy a business uses over a year

LOA – Letter of Authority, usually signed by a business giving a consultancy or broker permission to speak to suppliers on their behalf, allows for tender of prices/collection of data and historical billing information

Unit Rate – The cost per Kilowatt Hour (KWH) of energy used.

Standing Charge – A standing charge is a daily fixed cost you pay for having access to a gas and/or electricity supply. It works a little bit like the line rental on your phone bill – you always pay it no matter what, and then you pay for individual calls on top. Some suppliers will offer a “Zero Standing Charge” rate, in this case, the money that would usually be taken as a standing charge will be built into a client unit rate.

Available Capacity – Availability , or Available Supply Capacity is in simple terms the size of the wire through which electricity can enter a premise. It is not charged to all customers but is limited to those with maximum demand metering or in other words those with the largest load requirements. Energy suppliers charge availability on a p/kVA basis

Half Hourly – Half hourly (or HH) metering is a type of electricity meter. They measure how much electricity is being used in each half an hour and automatically send a meter reading via a phone connection. There are around 100,000 half hourly meters in the UK and they are for businesses with high energy usage.

AMR – Automatic meter reading (AMR) is the technology of automatically collecting consumption, diagnostic, and status data from water meter or gas metering devices and transferring that data to a central database for billing.

Smart Meter – A smart meter is a meter that records consumption of electric energy and communicates the information to the electricity supplier for monitoring and billing. Smart meters typically record energy hourly or more frequently, and report at least daily.

TPI – Third Party Intermediaries sit between end users and energy suppliers (usually a broker or a consultant), TPIs can offer advice and products to assist with a range of functions including energy procurement, efficiency and management.

Pass-Through Contract – A pass-through electricity contract splits your bill in two between the “fixed” commodity element, which you pay throughout your term and non-commodity costs, which may vary over time. The basic premise is that the supplier passes these non-commodity costs direct to you, they won’t build in any risk margin or premiums, however there is a risk that these may increase over time.

Commodity – the raw “energy” e.g. the physical electricity or gas

Non-Commodity – The non-commodity cost includes the other charges that make up the energy bill that are not for electricity or gas (the commodity) itself. These compulsory charges cover the cost of transporting and delivering electricity and gas, balancing the grid and all network costs plus taxes.

Contract End Date – the date which signifies the end of your current supply contract.

Termination Date – The last day by which termination must be given to your current energy supplier to notify them of your intent to not automatically renew.

Deemed Rates – A Deemed Tariff is provided for under Schedule 6 of the Electricity Act 1989 and Schedule 2B of the Gas Act 1986. It arises where a supplier already supplies electricity and/or gas to a property and there is no formal supply agreement in place with the customer. Deemed rates are normally considerably higher than usual contracted rates.

Out of Contract Rates – An out of contract tariff is provided by a supplier when a customer fails to “terminate” their existing contract, hasn’t agreed to either renew with current provider or switch to a new supplier. Out of Contract rates are normally considerably higher than usual contracted rates