Comparing energy quotes is not only good practice—it’s essential to ensure you're getting the best deal for your business. In a market where suppliers often present competitive rates, it’s important to look beyond the headline figures to understand the true cost of your energy contract.
One of our clients recently received a quote from Pozitive Energy that appeared attractive at first glance. However, a closer look revealed several key hidden energy costs missing from the proposal, which could significantly increase the overall cost of the contract.
In this blog, we’ll break down the hidden energy costs that Pozitive Energy didn’t include and explain how these could impact your energy spend, so you can make sure you’re comparing quotes on a like-for-like basis.
The Hidden Energy Charges You Need to Know About
While the Pozitive Energy quote included rates for standing charges and unit rates for both day and night electricity consumption, it left out several important hidden costs. These charges can make a substantial difference to your overall energy spend, particularly for businesses with Half-Hourly Meters.
1. Distribution Fixed Charge (p/MPAN/day)
This is the cost of transporting electricity from the grid to your business premises, charged by your local distribution network. In the case of one of our clients, the Distribution Fixed Charge from SP Energy Networks was a staggering 2290.0300 p/MPAN/day. However, Pozitive Energy did not include this in their quote, making the standing charge appear much lower than it actually was.
2. National Grid Transmission Fixed Cost (p/Per Site/day)
This charge covers the cost of maintaining the national electricity transmission system. For the same client, this amounted to 915.5863 p/Per Site/day, again not included in the initial quote from Pozitive Energy.
3. Capacity Charge (kVa per day)
If you have a Half-Hourly Meter, you’ll also need to pay a Capacity Charge. This is based on your kVa (kilovolt-ampere), which measures the maximum demand your business could place on the electricity grid at any given time. For this client, Pozitive Energy did not include the kVa charge of 5.4810 pence per kVa per day. With a kVa of 150, this represents an additional daily cost of £8.22, not mentioned in their quote.
The True Cost of Your Energy Contract: Beware of Hidden Energy Costs
If you were to add up these hidden energy costs, you’d see just how significant the impact could be. Let’s look at the numbers for the client in question:
Standing Charge (per day): 75p (quoted by Pozitive Energy)
Distribution Fixed Charge (per day): 2290.0300 p/MPAN/day
National Grid Transmission Fixed Cost (per day): 915.5863 p/Per Site/day
Capacity Charge (per day): 5.4810 p/kVa/day for 150 kVa = £8.22/day
While Pozitive Energy quoted a standing charge of 75p per day, the actual daily cost for this client is £32.80. That’s a massive difference—and with these charges subject to potential increases in April every year, the costs could rise even further.
Does It Seem Too Good to Be True? Watch for Hidden Energy Costs!
If you’ve received a quote that looks unusually low, it’s important to ask the right questions. Does it seem too good to be true? It probably is! Suppliers might leave out key hidden energy costs to make their offer appear more competitive.
For example, SSE includes their FiT (Feed-in Tariff) charges separately, which can make their initial energy quote look cheaper than it really is. Even though this charge is billed separately, it's still something you’ll have to pay. If you get a unit rate of 26.83p and an additional FiT charge of 0.983p, this effectively increases your unit rate to 27.813p.
If you're ever in doubt about whether an electricity or gas offer seems too good to be true, ask all the questions you need to fully understand the true cost implications. Key things to ask about include passthrough charges such as Distribution Fixed Charges, National Grid Transmission Costs, and Capacity Charges. These can add up quickly and dramatically affect your overall spend.
Why These Charges Matter
It’s easy to see how leaving out these additional costs can make a quote seem much cheaper than it really is. When suppliers like Pozitive Energy pass through these charges without including them in the standing charge, it creates the illusion of a lower rate.
Other suppliers often bundle these charges into the standing charge and fix them, providing greater price stability over the duration of your contract. This allows you to budget more accurately and avoid unexpected increases.
What Should You Do?
If you’ve received a quote from Pozitive Energy or any other supplier, make sure you ask the following questions to ensure you're seeing the full picture:
Are passthrough charges included? If not, ask for a breakdown of all charges that could apply, including Distribution Fixed Charges, Transmission Fixed Costs, and Capacity Charges.
Are any of the charges fixed? Some suppliers fix these charges within the standing charge, protecting you from price hikes that occur (typically) each April.
How does this compare to other suppliers? A quote that appears lower could end up being much more expensive once all the charges are factored in. Make sure you compare quotes on a like-for-like basis.
How We Can Help
At The Smart Energy Company, we work with over 20 suppliers to ensure our clients receive transparent quotes that include all potential costs. We provide a full breakdown of standing charges, unit rates, and passthrough charges so you can make an informed decision about your energy contract.
We’ve helped numerous businesses avoid costly surprises by providing detailed, transparent quotes and live market comparisons to ensure you're getting the best possible rates.
If you’ve received a quote and want to make sure you’re seeing the full picture, or if you’re curious about what other suppliers can offer, contact us for a free review today.
Conclusion
When comparing energy quotes, it’s essential to dig deeper and ensure that all charges are accounted for. Suppliers like Pozitive Energy may offer attractive standing charges, but unless you factor in Distribution Fixed Charges, National Grid Transmission Costs, and Capacity Charges, you could end up paying much more than expected.
At The Smart Energy Company, we believe in full transparency. Contact us today to get a quote that includes everything you need to know, so you can avoid hidden costs and make an informed decision.
0151 459 3388 | info@smart-energy.uk
Comments