Published 6 March 2026
Changes to electricity transmission, distribution and balancing charges, the introduction of the Nuclear Regulated Asset Base (nRAB) Levy, and significant increases in gas transportation charges are creating additional considerations for UK businesses comparing electricity and gas contracts.
From 1 April 2026, revised Transmission Network Use of System (TNUoS) charges have increased costs for many electricity supplies. Distribution Use of System (DUoS) charges recover the costs of local electricity networks, while Balancing Services Use of System (BSUoS) charges recover the cost of balancing electricity supply and demand. Meanwhile, the nRAB Levy, introduced in November 2025, is helping fund the development of new nuclear generating capacity.
On the gas side, a new price control for Great Britain's gas distribution networks also took effect from 1 April 2026, increasing gas transportation charges across every network region. The Green Gas Levy, which funds the injection of biomethane into the gas grid, also continues to rise each year.
Although these costs affect suppliers across the market, the way they are incorporated into business energy contracts and bills can differ.
As a result, a quotation with a lower standing charge and unit rate may not necessarily represent the lowest overall cost.
Understanding how these charges work, and whether they are included within a supplier's quoted prices, is increasingly important when comparing business electricity and gas contracts.
Transmission Network Use of System (TNUoS) charges contribute towards the construction, maintenance and reinforcement of Great Britain's high-voltage electricity transmission network.
These charges are calculated and published by the National Energy System Operator (NESO) under the industry's regulated charging arrangements. Electricity suppliers recover the associated costs through their pricing and billing arrangements.
The network investment being funded includes:
As Great Britain's electricity system evolves, substantial investment is required to ensure the transmission network can accommodate changing patterns of generation and consumption.
The revised TNUoS tariffs introduced on 1 April 2026 included increases in the fixed residual charges applicable to many electricity supplies.
The residual element of TNUoS is recovered through fixed charges rather than being directly linked to the amount of electricity consumed.
Depending on how their supplier structures its pricing, businesses may therefore see:
Importantly, TNUoS tariffs are reviewed annually, with revised tariffs normally taking effect each April. This means suppliers must account for potential changes in network costs when pricing electricity contracts that extend across multiple charging years.
However, an increase in the underlying TNUoS tariff does not automatically mean a supplier is entitled to increase an existing customer's contracted rates. That depends on the terms of the electricity supply agreement.
Distribution Use of System (DUoS) charges recover the costs of operating, maintaining and developing the local electricity distribution networks that deliver power from the transmission network and local generation to homes and businesses.
DUoS charges are set by the relevant Distribution Network Operator (DNO), using Ofgem-approved charging methodologies. They vary by distribution region and by the characteristics of the electricity connection. DNOs normally bill electricity suppliers, which then recover those costs through their customer tariffs or billing arrangements.
Unlike TNUoS, which relates to the high-voltage transmission network, DUoS relates to the local distribution network. For some businesses, especially those with half-hourly metering, DUoS can include several elements:
The applicable charges depend on the meter and connection arrangements; not every business incurs every component. For smaller electricity supplies, DUoS is commonly incorporated into the supplier's standing charge and unit rates rather than appearing as a separate line on the bill.
DUoS charging statements are published in advance and tariffs are revised periodically, normally annually. Suppliers must therefore consider changes in distribution costs when pricing contracts that span several charging years.
As with TNUoS, a change in the DNO's underlying DUoS charges does not automatically entitle a supplier to alter an existing customer's fixed contract prices. That depends on the contract's specific terms.
Balancing Services Use of System (BSUoS) charges recover the cost of balancing Great Britain's electricity system in real time. This includes paying generators to increase or reduce their output, and managing constraints on the transmission network.
These charges are also set by NESO. Since April 2023, BSUoS has been recovered solely from electricity demand, through suppliers, rather than from generators. BSUoS applies to all business electricity supplies, regardless of meter type or consumption.
Unlike the residual element of TNUoS, BSUoS is charged per unit of electricity consumed. It is set as a fixed tariff for six-month periods, published in advance:
Because the tariff is known before each period begins, many suppliers build forecast BSUoS costs into their unit rates. Others identify it as a separate charge or recover it through pass-through provisions, so it should be checked when comparing quotations.
Tariffs from April 2027 onwards will depend on future NESO publications, which is a further consideration for contracts extending beyond that date.
The Nuclear Regulated Asset Base (nRAB) Levy is a government-backed funding mechanism designed to support the development of new nuclear power stations, initially Sizewell C.
Under the RAB model, certain costs can be recovered during the construction period, rather than relying entirely on revenue generated once a nuclear power station becomes operational.
The levy applies through electricity suppliers, which recover the relevant costs from customers, subject to applicable exemptions. It applies to electricity only and is not charged on gas supplies.
Unlike TNUoS and DUoS, which help fund electricity networks, or BSUoS, which funds system balancing, the nRAB Levy contributes towards the financing of new nuclear generation.
The underlying nRAB levy rate is reviewed and published quarterly, creating an additional consideration for suppliers when setting fixed electricity prices over longer contract periods.
Some suppliers may build forecast nRAB costs into their contracted unit rates, while others may recover relevant charges separately or through contractual adjustment provisions.
The important question for customers is not simply whether the nRAB Levy appears on their bill, but whether it is already included in their agreed electricity price or represents an additional recoverable cost.
Gas transportation charges are the gas equivalent of TNUoS and DUoS. They recover the cost of moving gas through two networks before it reaches a business's meter:
LDZ charges are made up of capacity, commodity and fixed customer charges, and include exit capacity charges that pass on a share of the national transmission costs. The charges vary by network region and by the size of the supply.
These charges are billed to the industry rather than directly to customers. For most business gas supplies, they are incorporated into the supplier's standing charge and unit rate rather than appearing as a separate line on the bill.
A new Ofgem price control for the gas distribution networks, known as RIIO-GD3, took effect on 1 April 2026. It increased the revenue the networks are allowed to recover, resulting in substantial increases in LDZ transportation charges. Average increases included:
Gas networks publish indicative charges around five months in advance, and final charges at least two months before they take effect each April. Suppliers therefore usually know the following year's charges when pricing a fixed contract, but changes in later charging years, or changes to the charging methodology, are less predictable.
As with electricity network charges, an increase in gas transportation charges does not automatically entitle a supplier to alter an existing customer's fixed contract prices. That depends on the contract's specific terms.
The Green Gas Levy funds the Green Gas Support Scheme, which provides support to producers injecting biomethane into the gas grid. The levy is paid by licensed gas suppliers and is typically recovered through the gas standing charge.
Unlike most other charges, the Green Gas Levy is not linked to consumption. It is charged as a fixed amount per gas meter per day:
The rate for each scheme year is set by the Department for Energy Security and Net Zero (DESNZ) and published by 31 December ahead of the April start. The government has also indicated its intention to move to a consumption-based levy in future, which could increase the cost for higher-consuming businesses.
For most businesses the current cost is modest, but it remains a regulated charge that could be recovered separately or adjusted under some contract terms.
One of the most confusing aspects of these charges is that suppliers do not necessarily recover them in the same way.
Broadly, suppliers may adopt different approaches, including:
These approaches can have materially different implications for customers.
For example, one supplier may include forecast network and levy costs within a higher initial quotation, while another may offer lower headline rates but recover certain costs separately.
Furthermore, a separately itemised charge does not necessarily mean the customer is paying more than originally agreed. The charge may simply be displayed separately for billing transparency.
Equally, the absence of a separate charge does not automatically guarantee that all associated costs are fixed for the contract term.
The supplier's product-specific contractual terms ultimately determine which charges are included, which are additional, and whether any amounts can change during the agreement.
Not necessarily.
A business electricity or gas contract may specify fixed unit rates and a fixed standing charge while still containing provisions allowing certain additional charges or adjustments.
These provisions may relate to changes in regulated network costs, government schemes or other third-party charges.
This creates an important distinction between a contract offering fixed headline rates and one that provides greater certainty over the customer's total energy costs.
For businesses seeking budget certainty, it is essential to establish whether network, balancing and levy costs are:
These distinctions are particularly important for contracts extending over two or three years, during which underlying network tariffs and levy rates may change.
Gas contracts can also include a volume consideration. Fixed gas prices are normally based on the supply's Annual Quantity (AQ), and some supplier terms allow gas used significantly above that level to be priced differently.
When comparing business electricity or gas quotations, it is natural to focus on the standing charge, unit rate and projected annual cost.
However, those figures may not always provide a complete comparison if suppliers treat certain non-commodity charges differently.
A supplier offering the lowest headline rates may ultimately prove more expensive if network, balancing, levy or other recoverable charges are excluded from the quotation.
Conversely, a supplier quoting slightly higher rates may provide greater price certainty if those costs have already been included.
Neither approach automatically makes one supplier cheaper than another.
The most meaningful comparison is the total expected contract cost, taking account of all applicable charges and any provisions allowing those costs to change during the contract term.
Climate Change Levy (CCL) and VAT are generally treated separately from quoted net energy costs and are applied according to statutory rates and eligibility rules.
Network, balancing and levy charges are different because their underlying costs are determined through industry charging and levy arrangements, while the way those costs are recovered from an individual customer depends on the supplier and the relevant contract.
Before accepting a business electricity or gas quotation, customers should establish exactly which charges are included in the proposed contract and whether any additional costs may arise.
For electricity, businesses should seek clarification on:
For gas, businesses should seek clarification on:
For both electricity and gas, businesses should also establish:
Where the position is unclear, written confirmation should be obtained before entering into a new agreement.
Businesses receiving notices of additional network, balancing or levy charges during an existing contract should also review the relevant contractual provisions before assuming that the increase is either unavoidable or incorrectly applied.
TNUoS, DUoS, BSUoS, the Nuclear RAB Levy, gas transportation charges and the Green Gas Levy are legitimate components of the wider cost of supplying energy, but their treatment within individual business electricity and gas contracts can differ.
For customers, this makes it increasingly important to look beyond headline standing charges and unit rates when comparing suppliers.
A quotation should clearly identify what is included, what is excluded and which charges may change after the contract begins.
Without that information, businesses cannot be confident that competing energy quotations are being compared on a genuinely like-for-like basis.
