Non-energy costs for small businesses
24th July 2018
Your contract covers two types of costs: your energy costs which we fix at the beginning of your contract and non-energy costs, which are variable and outside of our control. These are referred to as ‘pass-through amounts’.
In simple terms, non-energy costs cover the cost of transporting your energy to you and provide support for Government initiatives and interventions in the energy industry, such as climate change policies. In broad terms, these costs account for about half of your electricity costs. While they are calculated and collected with complex methods, we pass them on to you in the simplest form possible as part of your contract rates.
What are the charges for?
Firstly, we pay third party companies to operate the electricity system and transport the energy to you. For example, this covers the costs of maintaining the infrastructure and networks used to transport the energy from the generator to you.
Secondly, we are charged for Governmental schemes that support renewable energy generation and mechanisms that maintain security of supply, like the Capacity Market. Such initiatives work towards ensuring a better future for all consumers.
You can read a simple guide which explains what these costs are in greater detail.