Pass-Through Contract

Key takeaways

A pass-through contract separates the supplier’s energy price from other charges that are passed through to you as they change.

It can increase transparency, but reduces bill predictability because some components vary over time.

Ofgem publishes non-domestic terminology covering pass-through style costs/charges.

What is a pass-through contract?

A pass-through contract is a business energy contract where certain costs (often non-commodity charges like network and policy charges) are billed separately and can move over time, rather than being fully bundled into one fixed unit rate.

What to check before agreeing pass-through

1. Exactly which charges are pass-through (ask for a list).
2. Whether any admin fees or margins are applied to pass-through items.
3. Whether your quote comparison is truly like-for-like (all-inclusive vs pass-through can make “cheap unit rates” misleading).

Sources

1. Ofgem: Non-Domestic Glossary of Terms (includes pass-through / non-commodity terminology used in the market)