Half your energy bill isn’t the energy

UK businesses pay more than 15 different non-power costs on top of the electricity itself. They're hard to decode and, frankly, not the easiest to spell. We're breaking them down in plain English, so you know exactly where every pound is going.

NCCs Unpacked

Non-power costs, or non-commodity costs (NCCs), make up more than 60% of a typical business energy bill. Most businesses have never seen that number broken down. No business, or supplier, has any control over them.

They’re everything on your bill that isn’t the electricity itself: the cost of running the national grid, maintaining local networks and funding government energy policy. Think of them like the service charge and VAT on a restaurant bill. They’re part of what you pay, but they’re not the food.

These charges have been building up since the 1940s. Nobody added them all at once and nobody explains them as a whole.

Two things make them hard to deal with:

Most suppliers hide them.

They get bundled into the unit rate, buried in the fine print or left unexplained entirely. If you can’t see them, you can’t check them.

They move.

Government and industry bodies update these rates throughout the year. If your contract doesn’t fix them, your bill can change mid-contract, sometimes sharply, with no warning.

Every business pays these costs. They’re set by government and network operators, not by your supplier, and no supplier can negotiate them away. What suppliers can control is whether they show you the breakdown or hide it in the unit rate.

Here’s how tem handles each one: what it is, who sets it, and exactly how it lands on your bill.

AAHEDC

Assistance for Areas with High Electricity Distribution Costs

What is it? A small UK-wide charge that helps cover the extra cost of running electricity networks across the Highlands and islands of northern Scotland, where distribution is more expensive because of the terrain. Every business across Great Britain contributes a small amount, regardless of where they’re based. It’s reviewed once a year.

How tem handles it. Fixed into your unit rate. You pay the same rate for the length of your contract. No exemptions apply; everyone pays this one.

BSUoS

Balancing Services Use of System

What is it? BSUoS pays for the actions needed to keep the national grid balanced, minute by minute. When there’s too much or too little power on the system, the grid operator (NESO) steps in. For example, it might ask a wind farm to generate less or switch on some battery storage. The cost of these balancing actions is recovered through BSUoS, which is charged per unit of electricity you use and reviewed every quarter.

Capacity Charges

What is it? A charge for keeping a certain amount of capacity available for your site to import electricity from, or export electricity to, the local network. Your capacity is agreed with your Distribution Network Operator (DNO) and measured in kilovolt-amperes (kVA). You pay for this reserved capacity whether or not you use all of it, a bit like paying to reserve a parking space. The charge is based on your agreed capacity, not the amount of electricity you use.

How tem handles it. Shown as a separate, itemised line on your quote. We pass through the underlying network charge at cost, with no markup. The amount is based on your agreed capacity, the relevant DNO rate and your voltage level. DNO rates are reviewed annually.

CCL

Climate Change Levy

What is it? A government tax on business energy use, charged per unit of electricity or gas you use. It doesn’t apply to domestic energy bills, only businesses pay it. Reviewed once a year.

How tem handles it. Itemised as its own line on your invoice and quote, never folded into the unit rate.

Reliefs available. Businesses with a Climate Change Agreement (CCA) get a 92% discount on the electricity CCL and 89% on gas. Charities using energy for non-business purposes, very low-usage sites and certain industrial processes can be fully exempt.

CfD Levy

Contracts for Difference Interim Levy

What is it? This funds top-up payments to renewable and nuclear generators when wholesale electricity prices fall below the price they were promised when they built their project. Effectively a price floor that made new clean power investable. When wholesale prices rise above that floor, generators pay back into the pot instead, so the cost to businesses can go up or down. Reviewed every quarter.

How tem handles it. Fixed into your unit rate for the length of your contract.

Reliefs available. Energy-intensive businesses with a valid EII certificate get 100% relief. P442 Exempt Supply Scheme sites get a reduction too.

CM

Capacity Market Levy

What is it? This funds payments to power stations and demand-response providers to keep them on standby, ready to step in if the grid is at risk of running short. Think of it like insurance: you pay a bit when nothing's wrong, so you’re covered when things don’t go as planned. Reviewed every quarter.

How tem handles it. Fixed into your unit rate for the length of your contract.

Reliefs available. Energy-intensive businesses with a valid EII certificate get 100% relief. Sites on the P442 Exempt Supply Scheme get a reduction too — how much depends on eligibility.

DUoS

Distribution Use of System

What is it? This pays for the local electricity network – literally the wires and cables that bring power to your site. It’s split into Red, Amber and Green time bands: you pay more for power used at busy periods of the day (Red) and less at quiet ones (Green), because that’s when the network is under the most or least strain. Reviewed once a year.

How tem handles it. Fixed into your day and night unit rates. You won’t see a separate line for this because it’s already built into the rates you’re quoted.

Reliefs available. Businesses with a valid EII certificate get 90% compensation on this charge.

EII Support Levy

Energy Intensive Industries Support Levy

What is it? A charge on non-energy-intensive businesses that funds discounted network costs for energy-intensive manufacturers elsewhere in the economy. If your business doesn’t hold EII status, you pay a small amount per unit to fund relief for those that do. Introduced in April 2024 and expected to rise as EII relief increases. Reviewed once a year.

How tem handles it. Fixed into your unit rate for the length of your contract. If your business does hold a valid EII certificate, you don’t pay this levy at all, you’re the beneficiary of the scheme it funds instead.

Excess Capacity Charges

What is it? A penalty charge for using more power than your site agreed to with its network operator. Similar to going over a data allowance. It’s only ever charged if you actually exceed your agreed limit.

How tem handles it. Only appears on your bill in months where it’s triggered. It’s not a predictable, recurring line, so we can’t itemise an amount on your quote in advance. If your site stays within its agreed capacity, you’ll never see this charge. The rate itself is set by your network operator and reviewed every April.

FiT

Feed-in Tariff

What is it? A legacy scheme that supports small-scale renewables – rooftop solar, small wind turbines – installed by homes and businesses before the scheme closed to new applicants in 2019. Everyone still contributes a small amount to fund the payments made to those existing installations. It’s winding down gradually and is expected to end around 2039. Reviewed once a year.

How tem handles it. Fixed into your unit rate for the length of your contract.

Reliefs available. Energy-intensive businesses with a valid EII certificate get 100% relief. P442 Exempt Supply Scheme sites get a reduction too.

Fixed DUoS

Standing Charge

What is it? A daily fee for simply being connected to the local electricity network, similar to a landline rental, charged whether or not you use much power that day. Reviewed once a year.

How tem handles it. Built into your standing charge. You’ll see it as part of that daily fee on your bill, not itemised separately.

LCD CfD

Low Carbon Dispatchable Contracts for Difference, new from April 2027

What is it? A new government scheme starting from April 2027 that supports low-carbon power stations that can be switched on and off as needed (rather than only running when the weather allows it). It works on the same principle as the main CfD Levy: it tops up generators when wholesale prices are low and claws money back when prices are high.

How tem handles it. Billing treatment is still being finalised so check the hub for an update closer to April 2027. Likely to follow the same relief pattern as the standard CfD Levy for energy-intensive businesses but this isn’t confirmed yet.

Meter Charges

Site Visits

What is it? Covers the cost of an engineer physically visiting your site to check, fix or replace your meter. They might be investigating a fault or swapping out equipment.

How tem handles it. This one depends on when your contract started. On new contracts, it's a small fixed charge a month included in your standing charge, so there's no surprise per-visit charge. tem carries the risk if the actual cost of a visit comes in higher. If you're on an older contract (signed before 14 September 2026) it still works the old way: only charged when a visit actually happens, with the amount depending on the reason for the visit, your meter type and the rates set by your appointed meter operator.

Meter Charges

Standard

What is it? Covers the ongoing costs of the companies that maintain your meter, collect and process your half-hourly usage data and own the physical meter itself. These are three separate services from three separate providers, bundled into one line.

How tem handles it. Itemised as its own line on your quote and invoice. The amount depends on your meter type and which service providers are appointed to your site and can change if those underlying contracts are renegotiated.

Nuclear RAB

Nuclear Regulated Asset Base

What is it? Funds the construction of new nuclear power stations (such as Sizewell C) through a charge on every unit of electricity used across Great Britain. Think of it like everyone chipping in towards a mortgage on a power plant that will eventually supply the grid. It’s a relatively new charge and expected to grow significantly as construction progresses. Reviewed every quarter.

How tem handles it. Fixed into your unit rate for the length of your contract. Contracts signed before September 2025 may see this as a separate passthrough line instead.

Reliefs available. P442 Exempt Supply Scheme sites get a reduction. How much depends on eligibility.

RCRC

Residual Cashflow Reallocation Cashflow

What is it? A monthly balancing adjustment. When the industry’s settlement process leaves small amounts of money over or short, RCRC redistributes it across all customers. It can work in either direction, sometimes it’s a small extra cost, sometimes it’s a small credit, but it averages out close to zero over time.

How tem handles it. Fixed into your unit rate. Because it changes monthly and can move in either direction, you won’t see it itemised separately, it’s smoothed into the rate you’re quoted.

Reactive Power

What is it? A charge for electricity that flows through the system but doesn’t do useful work. It only affects sites whose equipment draws power inefficiently. Most well-run sites never see this charge.

How tem handles it. Only itemised on your bill if it applies to you: it’s triggered by your site’s own equipment, not a universal charge. If your power factor falls outside the acceptable range, your network operator sets the rate, reviewed every April. Installing power factor correction equipment can reduce or remove this charge entirely.

RO

Renewables Obligation

What is it? A legacy scheme funding large-scale renewable generation — big wind farms, solar parks, Energy from Waste (EfW) sites — built before the scheme closed to new entrants. It works through tradeable certificates (ROCs) that generators earn and suppliers must buy. The levy continues until roughly 2037 even though the scheme itself is closed. Reviewed once a year.

How tem handles it. Fixed into your unit rate for the length of your contract.

Reliefs available. Energy-intensive businesses with a valid EII certificate get 100% relief (increased from 85% in 2023). P442 Exempt Supply Scheme sites get an additional reduction.

TNUoS

Transmission Network Use of System

What is it? Pays for the high-voltage national transmission network: the pylons and cables that move electricity long distances across the country, as opposed to the local wires DUoS covers. It's charged as a flat daily fee based on your site's voltage connection: higher-voltage connections pay a lower rate. Set every April by the National Energy System Operator (NESO) based on a budget approved by the regulator, Ofgem.

How tem handles it. Passed-through and itemised as its own line on your quote, shown with an indicative amount upfront. NESO confirms next year's rate every January. Nobody knows the number before then. Suppliers who fold this into a "fixed" price usually build in a safety buffer to cover that uncertainty. We show you our forecast on your quote, then charge exactly what NESO charges us. No buffer, no markup.

Reliefs available. Businesses with a valid EII certificate get up to 90% compensation on this charge (increased from 60% when the scheme launched in 2024).

There is also the potential of a reduced charge. If you're billed TNUoS as a passthrough charge, lowering your site's kVA can lower your cost. Drop it far enough, and you move into a lower TNUoS tariff band entirely. Check your maximum demand against your current band; if there's room to bring it down, it's worth exploring.

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