A simple guide to non-commodity charges

Most business owners don’t have time to pick apart every line of an energy bill. You want to know what you’re paying and why. But then you see a list of charges with names like TNUoS and DUoS, and it’s easy to switch off.

These aren’t random extras. They’re called non-commodity charges, and they now account for more than half of a typical electricity bill. Understanding them won’t stop them appearing, but it can help you make smarter choices and prepare for changes ahead.

Commodity vs non-commodity: the two halves of your bill

• Commodity costs – this is the wholesale price of the electricity or gas your business uses. It rises and falls with global markets.
• Non-commodity costs – these are compulsory third-party charges, set by government, regulators and network operators. They cover the cost of running the networks, funding renewable schemes, and making sure supply is reliable.

Non-commodity charges are not optional, but they’re not random either. Each one has a purpose.

The main charges explained

Here’s what the most common line items actually mean:

• TNUoS (Transmission Network Use of System): the cost of building, running and upgrading the high-voltage grid that moves power across the UK. These charges are expected to rise in the coming years.
• DUoS (Distribution Use of System): pays for local networks—the cables, substations and repairs in your region. Costs differ depending on location.
• BSUoS (Balancing Services Use of System): pays for keeping supply and demand balanced in real time, including sudden outages or constraints.
• CfD (Contracts for Difference): long-term price support for low-carbon generators, giving them stability and encouraging investment.
• RO (Renewables Obligation): an older scheme for large renewable projects. It closed to new entrants in 2017, but existing contracts run into the 2030s, so it still appears on bills.
• CM (Capacity Market): ensures backup electricity is available during peak demand, reducing the risk of blackouts.
• FiT (Feed-in Tariff): recovers the cost of small-scale renewables supported under the scheme, such as rooftop solar.
• CCL (Climate Change Levy): an environmental tax charged on business energy use.
• EII Support Levy: Covers the compensation scheme relief given to energy-intensive industries.
• AAHEDC (Assistance for Areas with High Electricity Distribution Costs): A charge to help cover higher distribution costs in the North of Scotland.
• Nuclear RAB (Regulated Asset Base): A charge that helps fund the development of new nuclear power stations.

What this means for you

Non-commodity charges affect every organisation, but the impact depends on how much energy you use and when you use it. A few areas are especially important to understand:

• Standing charges – the fixed daily amount that applies regardless of usage. For businesses with lower consumption, these can make up a large share of the bill. For higher users, they matter less in proportion but still add up over time.
• DUoS costs – distribution charges that rise during peak times (weekday late afternoons and evenings). Businesses with flexibility in their operations can reduce exposure by shifting activity outside of these windows. For manufacturers or energy-intensive sites, the savings from managing peak use can be substantial.
• BSUoS costs – balancing charges that vary depending on grid conditions especially relating to renewable generation. They can’t be controlled directly, but awareness helps with forecasting and understanding why bills aren’t always steady.

The key is knowing which charges you can influence, and which are fixed. That knowledge helps you decide where effort is worth it, whether you’re running a small office or a large industrial site.

How charges are changing

Looking ahead, several trends are clear:

• TNUoS (Transmission charges) will keep rising as the UK reinforces its grid to connect more renewables. Large increases are expected from April 2026.
• DUoS (Distribution charges) will vary more sharply by region, reflecting local investment needs.
• Support schemes like CfD and the Capacity Market will remain, ensuring funding for new low carbon generation and system security.

• Nuclear RAB is a new charge to be applied from November 2025, initially to cover funding for construction of new nuclear plants. This charge may rise with initial tariff only agreed to 2027 by Ofgem.

The overall picture: non-commodity charges are likely to increase, even if wholesale prices settle. For SMEs, this means bills may not fall as much as expected when commodity markets calm down.

What businesses can do today

You can’t remove non-commodity costs, but you can manage their impact. Here are practical steps:

• Request a clear breakdown. Ask your supplier to show you what each charge means. Turning jargon into plain English helps you see where the weight of your bill lies.
• Check usage patterns. If high-demand tasks can be moved away from peak DUoS periods, you’ll reduce exposure to higher charges.
• Focus on efficiency. Every unit you don’t use reduces both commodity and non-commodity costs. Think lighting upgrades, better heating controls, or equipment checks.
• Review contracts carefully. Some contracts pass through non-commodity charges directly, others include them in fixed rates. The right choice depends on how predictable you want your bills to be.
• Plan ahead. Non-commodity charges are rising. Building this into your budgeting means fewer surprises later.
• Seek independent advice. An impartial review can flag hidden costs, show how charges are changing in your sector, and suggest quick actions.

Energy bills might never be simple, but they don’t have to feel like a mystery. When you understand what non-commodity charges are, you can see which ones matter for your business and where you have room to act.

If you’d like a plain-English breakdown of your bill and clear steps to reduce costs, you can request a free energy health check from Troo. It’s a practical way to understand your charges today and prepare for what’s coming in the future.