UK suppliers are increasingly passing through higher “non-commodity costs” to consumers, which are costs beyond the price of the actual gas or electricity. These pass-through charges, such as for the transmission network, meter operation, and government levies, are now a major part of energy bills and are rising due to factors like government policy (e.g., the Warm Home Discount expansion), infrastructure costs, and the costs of renewable energy schemes. As a result, these costs are becoming more visible on bills as suppliers are starting to show them separately, and they are becoming a significant focus for businesses and regulators looking to manage energy spending and ensure fairness.

The Final Transmission Network Use of System (TNUoS) charges for the 2026/27 charging year are expected to be confirmed by 31st January 2026. These updated tariffs will come into effect from 1st April 2026. Until the charges are finalised, we won’t have full visibility on the exact impact. While many suppliers have already factored in estimated TNUoS costs into their rates, there may still be pass-through costs depending on the final figures.

What are Pass-Through Charges?

Non-Commodity Costs: These are costs that are separate from the price of the energy itself.

Examples: They include network charges (for transporting energy), meter operator charges, data collection fees, and levies for government policies and renewable energy generation.

Historical Context: These costs were previously often bundled into the unit rate or standing charge but are now increasingly shown separately.

Why are They Increasing?

Government Policies: Initiatives like the Warm Home Discount add costs that are passed on to all customers through the standing charge.

Infrastructure and Network Costs: Upgrades and maintenance of the energy networks (transmission and distribution) lead to higher charges.

Renewable Energy Schemes: The cost of supporting renewable energy sources, like the Contracts for Difference (CfD) scheme, is ultimately covered by consumers through their energy bills.

Increased Visibility: Suppliers are changing how they present bills, making these previously hidden costs more apparent to consumers and businesses.

What Does This Mean for Consumers and Businesses?

Higher Bills: Pass-through costs are now a significant portion of energy bills, especially for businesses.

Need for Management: Understanding and managing these charges is crucial for controlling overall energy spend.

Regulatory Attention: Ofgem is reviewing these costs and looking for ways to provide more choice in how customers pay them, such as by introducing lower standing charge tariffs.

Impact on Contract Choices: For businesses, securing fixed-term contracts can protect them from future increases in these non-commodity costs.