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Energy Charges & Costs
Pass-Through Costs
Key takeaways
Pass-through costs are charges your supplier doesn’t set, but passes on (often network and policy costs).
They can make pricing more transparent, but your bills can be less predictable.
Always confirm exactly which costs are pass-through before comparing “cheap” unit rates.
What are pass-through costs?
Pass-through costs are the parts of your bill that sit outside the supplier’s control and can change over time.
A common way suppliers describe them is: transport and distribution costs plus policy and industry charges, billed at the prevailing rates.
Pass-through contract vs all-inclusive contract
All-inclusive
- You pay a unit rate and standing charge that already include most non-commodity costs.
- Bills are usually more predictable.
Pass-through
- The “commodity” price can be separated, and the extra charges are billed separately.
- If those charges rise or fall, your final bill rises or falls too.
When pass-through can make sense
Pass-through pricing can suit you if:
- you want transparency over the bill components
- you’re comfortable with more bill variability
- you have the data (especially half-hourly) to spot cost drivers
It can be less suitable if:
- you need highly predictable budgeting
- you don’t want exposure to changes in regulated/policy costs
What to ask before agreeing pass-through
- Which exact items are passed through (network, policy, metering, settlement)?
- Are pass-through items billed with markup, without markup, or with an admin fee?
- Can the supplier provide an illustrative total-cost estimate using your last 12 months’ kWh?
