How to Read a PE Solutions Business Energy Quote

We compare business energy quotations every day.

One thing we specifically check on PE quotations is how the charges are presented.

We have seen real PE customer quotations where the headline Standing Charge was only one part of the fixed daily cost.

Other fixed costs were shown separately.

That creates an easy comparison mistake.

A customer can look at:

Supplier A standing charge: £4.00/day

PE standing charge: £1.25/day

and conclude that PE has the cheaper fixed cost.

But that comparison is meaningless until every applicable PE fixed charge has been checked.

If the PE quotation also contains separate daily distribution or transmission charges, those matter too.

The correct question is not:

“Which supplier has the lowest standing charge?”

It is:

“What will each quotation actually cost me?”

This is not a theoretical warning.

In PE quotations and contract information supplied to us by customers, we have seen fixed costs separated into different lines.

For example, a quotation can contain a Standing Charge while also showing separate distribution or transmission-related fixed charges.

The precise figures vary by quotation and supply.

That is why we do not publish one made-up PE charge and pretend it applies to everybody.

We check the actual document.

PE itself currently publishes a number of separate electricity charge categories, including:

• Capacity Charge
• Excess Capacity Charge
• Reactive Capacity Charge
• Transmission Fixed Charge
• Distribution Fixed Charge

Not every charge applies to every supply.

But every applicable charge needs to be understood.

Check the legal customer first.

This might be:

• A limited company
• Sole trader
• Partnership
• Charity
• Club
• Other legal entity

Do not sign simply because the trading name looks familiar.

For a limited company, check the actual registered company name.

If the wrong business is on the contract, fix it before proceeding.

Check the complete supply address.

This matters particularly where a business has:

• Several units
• Several buildings
• A farm
• An industrial estate
• Multiple shops
• A landlord supply
• Several meters at one address

Do not assume the quotation relates to the correct meter simply because the postcode is right.

For electricity, check the MPAN.

For gas, check the MPRN.

Compare it with a recent bill.

If you have several meters, do this for every quotation.

A fantastic price for the wrong meter is useless.

Find the proposed start date.

Then find the contract length or end date.

Do not look only at:

12 months

24 months

36 months

Check the actual dates where supplied.

Make sure the proposed start does not conflict with an existing fixed contract.

If you are renewing PE, compare the proposed start with your current Contract End Date.

This number matters enormously.

For electricity this is usually expressed in kWh.

For gas, annual consumption is also compared in kWh.

Check the consumption PE has used against:

• Your latest bill
• Previous bills
• Available consumption data
• Your actual trading pattern

Do not assume an annual-cost estimate is meaningful if the consumption behind it is wrong.

Imagine a quotation is calculated using 20,000 kWh.

But the business actually uses 50,000 kWh.

The annual-cost estimate is not giving you a realistic picture.

The rates may be correct.

The calculation can still be unsuitable for comparing your expected cost.

Use the best consumption information available.

The unit rate is the price charged for each kWh of energy covered by that rate.

For a simple single-rate electricity meter, there may be one main unit rate.

But not every meter is single-rate.

You may have:

• Day
• Night
• Evening and Weekend
• or another multi-rate arrangement.

Do not compare a multi-rate PE quotation against another supplier using only one of the rates.

Suppose a meter uses:

30,000 kWh during the day

20,000 kWh at night

You need to calculate:

30,000 × Day Rate

plus

20,000 × Night Rate

Using all 50,000 kWh against the Day Rate gives the wrong answer.

Using all 50,000 kWh against the Night Rate gives the wrong answer.

If you do not know the split, check the existing bills or consumption data.

The Standing Charge is normally expressed as a daily amount.

For example:

125p/day = £1.25/day.

To turn that into a simple annual figure:

£1.25 × 365 = £456.25 per year.

But with a PE quotation, do not stop there.

The line labelled Standing Charge may not represent every fixed cost applying to the quotation.

Keep reading.

PE currently publishes Distribution Fixed Charge as a separate charge category measured in p/day.

If a Distribution Fixed Charge appears on your quotation and applies to the contract, include it when assessing the complete daily fixed cost.

Standing Charge:

125p/day

Distribution Fixed Charge:

137p/day

Simple combined daily fixed cost of those two lines:

262p/day

or:

£2.62/day

Annual cost:

£2.62 × 365

=

£956.30/year

This example demonstrates the calculation only.

Do not imply 137p/day is PE's standard current Distribution Fixed Charge.

Actual charges depend on the individual quotation.

PE also currently publishes Transmission Fixed Charge as a separate charge category measured in p/day.

If your quotation contains an applicable Transmission Fixed Charge, it needs to be considered alongside the other applicable fixed charges.

Standing Charge:

125p/day

Transmission Fixed Charge:

290p/day

Simple combined daily fixed cost of those two lines:

415p/day

or:

£4.15/day

Annual:

£4.15 × 365

=

£1,514.75/year

Again, this is a calculation example based on the structure we have seen on PE customer documentation.

It is not a statement that every PE quotation contains a 290p/day Transmission Fixed Charge.

Here is the comparison mistake we want customers to avoid.

Imagine you look only at:

PE Standing Charge:

£1.25/day

Another supplier:

£3.00/day

At first glance PE appears £1.75/day cheaper.

But now imagine that the PE quotation also contains an applicable:

Transmission Fixed Charge:

£2.90/day

The relevant PE fixed daily cost from those two lines becomes:

£1.25 + £2.90

=

£4.15/day

Now the comparison looks completely different.

That is why we read the whole PE quotation.

Display this as an educational worked example.

The charge structure and figures on an individual PE quotation must always be checked.

We have also seen PE customer quotation information where the balance between distribution and transmission-related fixed charges changed between quotations.

For example, a previous structure might contain:

A Standing Charge

A separate Distribution Fixed Charge

A separate Transmission Fixed Charge

while a newer quotation may show:

A Standing Charge

£0.00 Distribution Fixed Charge

A different Transmission Fixed Charge

That means comparing only one charge line between the old and new quotation can be misleading.

Compare the complete cost structure on both.

This needs separate treatment.

PE currently lists Capacity Charge in:

p/kVA/day

That is not the same measurement as:

p/day.

So do not simply take:

Standing Charge p/day

plus

Capacity Charge p/kVA/day

and add the two numbers together.

You need to know the applicable capacity in kVA.

A simple capacity calculation is:

Capacity in kVA

×

Capacity rate in p/kVA/day

×

number of days

Agreed capacity:

100 kVA

Capacity charge:

5p/kVA/day

Daily capacity cost:

100 × 5p

=

500p/day

=

£5/day

Annual illustration:

£5 × 365

=

£1,825/year

This is an educational example only.

The 5p rate is not a PE quotation or current PE standard rate.

PE currently lists Excess Capacity Charge in p/kVA/day.

This is separate from an ordinary p/day fixed charge.

Do not automatically assume an excess-capacity charge will apply every day or to every supply.

If it appears on the quotation or contract, establish:

• When it applies
• What capacity it applies to
• The rate
• How the charge is calculated
• What would trigger additional cost

If you do not understand it, ask before signing.

PE currently lists Reactive Capacity Charge in p/kVArh.

Again, that is a different unit.

It cannot simply be added to:

p/day

p/kWh

or

p/kVA/day

as though they were the same thing.

If a reactive charge applies to the supply, understand the measured quantity and rate before trying to calculate its financial effect.

For a customer who has never heard of kVArh, the important point is simple:

Do not ignore the line.

And do not guess what it costs.

Keep reading after the rates you recognise.

PE's current bill guidance says customer charges can include:

• Standing Charge
• Unit Rate
• Discounts
• Pass-through Charges
• Other bespoke charges under the contract
• Climate Change Levy

PE also says new network charges or government levies may arise during a contract and that, where the contract allows, applicable charges can be passed through.

That is another reason to read the contract terms rather than treating a business energy quotation as only two numbers.

Do not assume that.

PE's current bill guidance says that on a fixed-term contract the Standing Charge and Unit Rate will typically not increase.

But PE also says customers may become subject to new network charges or government levies during the contract and that, where the contract allows, these can be passed through.

It also says network charges and government levies can be updated annually.

So when comparing a PE fixed contract, establish exactly:

• Which elements are fixed
• Which elements can change
• Which charges can be passed through
• Which contract terms apply

Do not rely on the word “fixed” by itself.

For a straightforward single-rate quotation with only p/kWh and p/day charges entered into the calculation:

Annual unit cost:

Annual kWh × unit rate ÷ 100

Annual fixed daily cost:

Total applicable p/day charges ÷ 100 × 365

Then:

Annual unit cost + annual fixed daily cost

=

Simple estimated annual cost

But stop there if the quotation also contains charges calculated using:

kVA

kVArh

different consumption bands

separate registers

or another calculation method.

Those need to be calculated correctly as well.

Imagine a meter uses only 3,000 kWh a year.

A difference of 1p/kWh changes the annual unit cost by:

£30.

But a difference of £2/day in fixed charges changes the annual cost by:

£730.

That is why a low-usage meter cannot sensibly be compared using the unit rate alone.

This is particularly relevant for supplies such as:

• Storage units
• Outbuildings
• Security supplies
• Small offices
• Occasionally used buildings
• Pumps
• Seasonal sites

At 100,000 kWh per year:

1p/kWh = £1,000/year

2p/kWh = £2,000/year

3p/kWh = £3,000/year

At 500,000 kWh per year:

1p/kWh = £5,000/year

So on a high-usage supply, do not become so focused on a fixed daily charge that you ignore a material unit-rate difference.

The correct comparison uses both.

Sometimes the quotation with the higher fixed cost is still cheaper overall.

That depends on consumption.

Supplier A:

£1/day total fixed cost

30p/kWh

Supplier B:

£4/day total fixed cost

27p/kWh

Supplier B costs an extra:

£3/day × 365

=

£1,095/year

in fixed cost.

But its unit rate is:

3p/kWh cheaper.

Breakeven consumption:

£1,095 ÷ £0.03

=

36,500 kWh/year.

Below approximately 36,500 kWh, Supplier A is cheaper using these simple figures.

Above approximately 36,500 kWh, Supplier B is cheaper.

This is why there is no universally “best” standing charge or unit rate.

Use it as a useful reference.

Do not treat it as a substitute for checking the quotation.

Ask:

• What consumption has been used?
• Which rates are included?
• Which fixed charges are included?
• Are capacity charges included?
• Are all applicable additional charges included?
• Does the consumption match the business?

If the underlying consumption is wrong, the annual estimate can be a poor guide even where the quoted rates themselves are correct.

Check.

Do not assume.

Business energy quotations and published rates can be displayed exclusive of VAT.

When comparing two suppliers, make sure you are comparing figures on the same VAT basis.

Also remember that some qualifying supplies can be eligible for reduced VAT treatment.

Do not change a VAT status simply because a customer says they are a charity.

Eligibility depends on the use and circumstances of the supply.

Check whether Climate Change Levy is included in the annual comparison or shown separately.

PE's own bill guidance identifies Climate Change Levy as one of the charge types that can appear on an energy bill.

Do not accidentally include CCL on one supplier's annual cost while excluding it from the other and then call the comparison fair.

Use the same basis.

A 12-month contract and a 36-month contract are not the same product.

A longer agreement can provide price certainty for longer.

A shorter agreement allows an earlier market review.

Neither is automatically better.

Check:

• Price
• Complete charge structure
• Start date
• End date
• Contract length
• Which charges are fixed
• Which charges can change

Then decide.

You should be able to answer:

• Who is the customer?
• Which meter is this for?
• When does it start?
• When does it finish?
• What is the annual consumption?
• What is every unit rate?
• What is the Standing Charge?
• Are there additional fixed charges?
• Is there a Distribution Fixed Charge?
• Is there a Transmission Fixed Charge?
• Is there a Capacity Charge?
• Are there any other applicable charges?
• Which elements are fixed?
• Which elements can change?
• What is the estimated annual cost?
• What happens at the end of the contract?

If you cannot answer a material question from the documentation, ask before signing.

Send the whole quotation.

Not just the first page.

Not just a screenshot of the unit rate.

And not just the line labelled Standing Charge.

Send:

• The complete PE quotation
• A recent bill
• Your current contract if available
• Consumption information if available

If there are several meters, tell us which quotation belongs to which meter.

We can then check the charges and compare the quotation properly.

The first thing we want to know is whether we are comparing the whole quote.

With PE, we specifically look below the Standing Charge.

If there is a distribution charge, transmission charge, capacity charge or another separate charge, we want to know about it.

Then I check the units.

p/day is one thing.

p/kWh is another.

p/kVA/day is another.

You can't just add all the numbers together.

Once we understand how every applicable charge is calculated, we can work out what the contract is likely to cost using the customer's actual consumption.

Then we can compare it properly.

This is one of the biggest things we look for on a PE quote.

We've had PE prices in front of us where you could easily look at the Standing Charge and think:

“That's cheap.”

But then there are other charges further down.

That's why we keep saying send us the whole quote.

If you send us a screenshot saying:

24.65p and £1.25 a day

We still don't know whether that's a good deal.

What else is on the quote?

Is there a transmission charge?

Distribution?

Capacity?

What usage have they quoted on?

Is it day and night?

How long is the contract?

That's the information we need.

And this isn't us saying PE is expensive.

We've put plenty of customers with PE.

It's us saying compare PE properly.

The same rule applies to every supplier.

We want to know what you are actually going to pay, not which two numbers look nicest on the front of the quotation.

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