Business energy pass-through charges explained (UK)
Understand what pass-through charges are, why they appear on business electricity and gas bills, and how to compare whole-of-market quotes with fewer surprises.
- Learn the difference between unit rates, standing charges and pass-through items
- See the common UK charge types (DUoS, TNUoS, BSUoS, capacity, metering and more)
- Get help comparing fixed, flexible and “all-inclusive” style tariffs
- Submit your details to receive tailored business energy options
Whole-of-market comparison. Prices and charge structures vary by meter type, region, network and supplier terms.
What are business energy pass-through charges?
In the UK business energy market, pass-through charges are costs a supplier may pass on to you at cost (or near cost) rather than bundling them into a single fixed p/kWh rate. They’re usually linked to your site’s meter, how and when you use energy, and the regional electricity network that serves your premises.
You’ll most often see pass-through items on electricity contracts (especially half-hourly meters), but some gas contracts can include additional pass-through elements too (e.g. certain transportation or metering costs depending on terms). The important point is this: two quotes with the same unit rate can still cost different amounts once pass-through charges and consumption patterns are considered.
Why it matters for procurement
If your business is budgeting, tendering, or comparing supplier offers, you need to know whether a quote is “all-inclusive” or whether some costs can move with industry charges and your usage profile. Understanding the structure reduces the risk of bill shock.
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Why pass-through charges catch businesses out
Quotes can look cheaper than reality
A low p/kWh unit rate may exclude network, balancing, or metering-related costs. If those costs are passed through, your total bill can be higher than expected.
They depend on how you use electricity
Items such as DUoS can vary by time bands (e.g. red/amber/green). Your operating hours and peak demand can materially change charges.
Contract wording differs by supplier
“Pass-through”, “non-commodity”, “third-party”, and “excluded charges” may cover different items. Comparing like-for-like is essential.
Common pass-through charges on UK business electricity
The exact list depends on your supplier and meter setup. Below are common categories businesses encounter. Use this as a checklist when reviewing a contract summary, tender response or bill breakdown.
| Charge type | What it relates to | Why it changes | Who’s most affected |
|---|---|---|---|
| DUoS (Distribution Use of System) | Regional distribution network charges for using local electricity networks. | Region, time bands, meter type, and your consumption profile. | Sites with predictable peak hours, or half-hourly meters exposed to time-of-use bands. |
| TNUoS (Transmission Network Use of System) | Charges for using the national transmission network. | Industry charging statements, demand patterns and (for some) capacity/demand measures. | Larger demand sites; some structures apply more to HH/settled profiles. |
| BSUoS (Balancing Services Use of System) | Grid balancing costs to keep supply and demand matched in real time. | System conditions, market dynamics and industry-wide balancing requirements. | Often passed through on HH contracts; can materially impact high-volume users. |
| Capacity / capacity-related charges | Charges linked to agreed capacity or peak demand measures (where applicable). | Contracted capacity, exceeded capacity events, and industry charging rules. | Manufacturing, hotels, data rooms and sites with high peak loads. |
| Metering & data | Meter operator (MOP), data collection (DC) and data aggregation (DA) services. | Meter type (HH/non-HH), service levels, and contracted metering arrangements. | Sites with half-hourly meters or upgraded comms, and multi-site portfolios. |
| Other third-party / excluded items | Supplier-defined non-commodity charges that may sit outside the headline unit rate. | Supplier terms, industry changes, and updates to charging methodologies. | Any business that compares on p/kWh alone without reviewing the exclusions list. |
Tip: When a supplier says “pass-through”, ask for the exact schedule of charges and whether they’re billed as p/kWh, p/day, £/kVA, time-banded, or reconciled after the fact.
All-inclusive vs pass-through: what’s the difference?
Suppliers and brokers sometimes describe pricing in different ways. Use the guide below to understand what you’re being quoted and how to compare like-for-like.
| Structure | What you typically see | Pros | Watch-outs |
|---|---|---|---|
| All-inclusive (bundled) | Single unit rate + standing charge that aims to include most non-commodity costs. | Budgeting is simpler; fewer variable line items. | May be priced higher to cover uncertainty; check what’s truly included and what isn’t. |
| Pass-through (partially unbundled) | Lower headline unit rate; separate non-commodity charges billed according to actuals. | Can be cost-reflective; may benefit sites that can manage peaks and time-of-use. | Budget risk if charges change or your usage shifts; requires closer bill validation. |
| Flexible / block / index-linked | Energy bought over time; non-commodity often passed through, especially for HH portfolios. | Risk management and buying strategy; potentially better for larger, multi-site users. | More complex; governance needed for approvals, reporting and forecasting. |
What to ask for on quotes
- Is the quote all-inclusive or are there excluded / pass-through charges?
- Which charge lines are excluded (list them)?
- Are DUoS/time bands included or billed separately?
- Are metering (MOP/DC/DA) costs included?
- How are reconciliations handled (e.g. estimated vs actual, true-ups)?
What to share for accurate comparisons
- MPAN/MPRN and meter type (HH if applicable)
- Latest 12 months’ consumption (or available half-hourly data)
- Opening hours and known peaks (e.g. ovens, compressors, EV charging)
- Any planned equipment changes or site expansions
- Multi-site list (postcodes + estimated volumes)
How to reduce pass-through charges (practical actions)
You can’t control every industry-wide charge, but many businesses can reduce exposure by improving data quality, managing peak demand, and choosing a contract structure that fits how the site operates.
- Start with your meter and data. Confirm whether you’re on a half-hourly meter, check that reads are accurate, and ensure your supplier is using the correct profile and meter operator details.
- Identify peaks and shift load where possible. If your site can move discretionary usage (e.g. pre-cooling, battery charging, process scheduling) away from peak periods, it may help reduce time-banded distribution impacts.
- Review agreed capacity (where applicable). Being over-capacity can be expensive; being under-capacity can also create issues. Align capacity with real operational needs.
- Validate bills and reconcile anomalies. Look for unexpected line items, unusual spikes, or duplicated metering charges—especially after a contract switch, meter exchange, or site change.
- Compare contract structures, not just p/kWh. Ask for a clear list of included/excluded charges, and model total costs based on your consumption pattern.
- Consider portfolio or flexible strategies for larger users. If you manage multiple meters or high volumes, a flexible approach may offer better control—provided you have the governance and reporting in place.
Need a quick sense-check? Use our form above and include a note when we contact you: “Please confirm what pass-through charges apply and whether an all-inclusive option is available for our meter.”
Common mistakes when reviewing pass-through charges
Comparing on unit rate alone
For HH and many SME electricity contracts, the non-commodity component can be significant. A “cheaper” rate can become more expensive after excluded charges are applied.
Not checking what’s included
Terms can differ between suppliers. Always request the schedule of included/excluded items and how they’re calculated and billed.
Assuming your usage pattern won’t change
New equipment, longer trading hours, refrigeration upgrades, or EV chargers can shift peaks. With pass-through pricing, that can change your total cost quickly.
Ignoring regional network differences
Two sites with the same consumption can face different distribution charges depending on their region and network characteristics.
FAQs: pass-through charges on business energy
Are pass-through charges the same as standing charges?
Not necessarily. A standing charge is a fixed daily amount set by the supplier for providing service and maintaining your account/metering arrangements. Pass-through charges are separate items (often non-commodity/network/balancing/metering) that may be billed according to published rates, time bands or actual costs, depending on contract terms.
Do all business energy contracts include pass-through charges?
No. Some suppliers offer all-inclusive pricing (bundling most non-commodity charges into the rate), while others offer pass-through or partially unbundled structures—common for half-hourly and larger users. Always confirm what is included/excluded in writing.
Why do pass-through charges change during a fixed contract?
A fixed contract usually fixes the commodity price (the energy cost), but pass-through items can move due to changes set by networks or the wider market, and because your time-of-use and peak demand can vary month to month. The exact mechanism depends on supplier terms.
Are pass-through charges only for electricity?
They’re most commonly discussed in business electricity procurement, but some business gas contracts can also include additional costs outside the headline unit rate depending on contract structure and metering arrangements. Always ask for the supplier’s excluded charge schedule.
How can I check whether my current contract has pass-through charges?
Look at your contract summary (or welcome pack) for phrases like “pass-through”, “third-party charges”, “excluded charges”, or “non-commodity”. On bills, check for line items beyond unit rate and standing charge. If unsure, submit the form above and we can help you interpret the structure when comparing options.
Can EnergyPlus help with multi-site business energy comparisons?
Yes. If you have multiple premises, comparing on a whole-of-market basis helps you assess contract structures and ensure excluded charges are understood across the portfolio. Add your main postcode in the form and share additional sites when we contact you.
What businesses say about clearer comparisons
“We didn’t realise how much of our cost sat outside the unit rate. Having the quote broken down made it easier to budget and justify the decision internally.”
“The biggest win was understanding peak demand and time bands. We adjusted a couple of processes and the bills became more predictable.”
“Straight answers on what was included vs excluded. That clarity helped us compare suppliers properly and avoid surprises.”
Ready to compare business energy with clarity on pass-through charges?
Submit your details and we’ll help you review suitable whole-of-market options, including how pricing is structured and what’s included or excluded for your meter type and location.
- Suitable for SMEs and multi-site portfolios
- Support comparing all-inclusive and pass-through pricing
- Clear next steps for switching and contract start dates
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