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Pass-Through Charges Explained

Your invoice has lines that aren’t the unit rate and it’s hard to tell what you can influence. This guide explains pass-through charges in plain terms and how they sit next to your contract price.

Next step: If you use under about 50,000 kWh a year, you can get a quote in under 90 secs online — fast, no obligation. Bigger supply, half-hourly metering, or prefer chat? Use the contact page.

What Are Pass-Through Charges?

Pass-through charges are network and policy costs suppliers pay to run grids and schemes; they usually appear on your bill as separate lines. They’re not “mark-up” for fun—you’re reimbursing regulated and industry costs. Read alongside understanding bills and standing charges.

Rough illustration: on a £10,000 annual bill, non-commodity items might be around a third of the total for some small firms—but your split depends on region, voltage level and tariff. You can’t haggle these elements down with the supplier; focus on total annual cost and the commodity rate when comparing quotes. Levies such as CCL sit in a different bucket and still matter to the total.

The Main Charges Explained

1. DUoS (Distribution Use of System):

• Cost of LOCAL electricity distribution network (poles, wires, substations in your area)
• Varies by region - London costs more than rural Scotland
• Typical cost: £300-800/year for small businesses
• Charged as p/kWh, varies by time of day (red/amber/green periods)

2. TNUoS (Transmission Network Use of System):

• Cost of NATIONAL transmission network (high-voltage power lines across UK)
• Gets power from generators to your local distribution network
• Typical cost: £50-150/year for small businesses
• Charged as fixed £/year or p/kWh depending on consumption

3. BSUoS (Balancing Services Use of System):

• Cost of balancing electricity supply with demand in real-time
• National Grid pays generators to ramp up/down to match demand
• Typical cost: £30-100/year for small businesses
• Varies monthly based on grid balancing activity

4. Other Pass-Through Costs:

• Renewable Obligation (RO): Funds renewable energy generation
• Feed-in Tariff (FiT): Pays small-scale renewable generators
• Capacity Market: Ensures sufficient generation capacity

Real Example: 30,000 kWh Business

Total annual bill: £7,800

• Commodity (energy): £5,100 (65%)
• DUoS: £1,800 (23%)
• TNUoS: £400 (5%)
• BSUoS & other: £500 (7%)

You can only negotiate the £5,100 commodity cost. The £2,700 pass-through charges are identical across all suppliers.

Can You Reduce Pass-Through Charges?

Short answer: No. Pass-through charges are set by Ofgem and network operators. Every supplier pays the same rates for your location.

What you CAN do: Focus on reducing total consumption (reduces pass-through charges proportionally) and negotiate better commodity rates. Comparing suppliers based on TOTAL cost (commodity + pass-through) gives you the real picture.

Related Guides

Your next step: When you are ready to compare business tariffs, get a business energy quote online (typically under a minute, no obligation). Larger supply, half-hourly metering, or you prefer messaging? See the contact page.