Manufacturers overpaying £65m on energy bills

Electricity Pylon UK Energy.
The most common issue in the manufacturing sector was incorrect rates applied to bills.

Manufacturers could be missing out on up to £65m of unclaimed refunds and incorrect charges on their energy bills, says business energy consultant, Inenco Group.

One in five energy bills have errors on them that frequently go unnoticed by organisations, according to Inenco’s analysis of thousands of business bills.

Inenco analysed business energy invoices to identify the most common errors and forecast the scale of the issue for all businesses in the UK – totalling up to half a billion pounds in incorrect charges.

A large manufacturer may unknowingly have had an incorrect rate being applied on their energy bills for years
A large manufacturer may unknowingly have had an incorrect rate being applied on their consumption for years

High value errors uncovered by Inenco included a food manufacturer paying more than £300,000 in inaccurate network charges, and £200,000 of incorrect meter reads uncovered on behalf of a single site factory.

A large manufacturer may unknowingly have had an incorrect rate being applied on their consumption for years, or a business with multiple sites will have hundreds of half-hourly meter reads automatically submitted each day, creating huge volumes of data to process and creating large margins for error.

The most common issue in the manufacturing sector was incorrect rates applied to bills, followed by meter read errors. The biggest value errors were caused by technical billing issues. Incorrect taxes were also an issue: 10% of all claims in 2016 resulted from incorrect Climate Change Levy rates applied to manufacturers within a Climate Change Agreement.

The accepted method of identifying these issues is by conducting invoice validation and bill audits to check for inaccuracies across the supply chain, yet only 20% of manufacturing businesses currently conduct these on a regular basis, according to Inenco.

The firm’s chief commercial officer, David Cockshott explained: “At a time when manufacturing energy costs are forecast to increase by 25% by 2020 and the sector is under pressure to reduce costs from every direction, recovering these missing millions could make a big impact to the bottom line.

“Paying too much for energy bills because of simple data issues or human error is easily resolved and can result in significant savings, from direct refunds to preventing future unnecessary pay-outs. While smart meters and smarter systems will go some way towards preventing future inaccuracies, the energy supply chain must work harder to prevent these issues from happening. It would pay for all manufacturers to undertake some form of invoice validation to check for incorrect charges and ensure they only pay for the energy they use.”