Energy Charges & Costs

Non-Commodity Costs

Key takeaways

Non-commodity costs are the parts of your bill that are not the wholesale cost of the energy you use.

They often include network charges and policy costs, and they can move over time even if your unit rate is fixed.

If a quote is “pass-through”, non-commodity costs can be billed separately, so comparing quotes needs a like-for-like view.

What are non-commodity costs?

In business energy, non-commodity costs usually means everything on your bill that is not the raw cost of gas or electricity.

They are sometimes described as “non-energy charges” or “third-party charges”, depending on the supplier and contract style.

SSE Energy Solutions describes non-commodity costs as the charges on top of the energy itself, including transmission and distribution costs and charges linked to government schemes and levies.

What typically sits inside non-commodity costs?

Different suppliers group things differently, but common components include:

Network charges

Charges for using the transmission network (often shown as TNUoS)
Charges for using local distribution networks (often shown as DUoS)
Charges linked to balancing the system (often shown as BSUoS)
Other network-related items, depending on the bill format

Policy costs and levies

Environmental and social schemes that are collected via suppliers (examples include RO, FiT, CfD, and the Capacity Market in electricity)

Metering and industry costs

Costs tied to metering, data collection/aggregation, and settlement arrangements (again, naming varies by supplier)

Important

On an “all-inclusive” contract, these may be bundled into your unit rate and standing charge.
On a “pass-through” contract, some or many of them may appear as separate line items that can vary.

Why do non-commodity costs change?

Even if your energy price is fixed, non-commodity costs can still move because many of them are driven by:

regulated charging methodologies
policy changes and scheme costs
system conditions (especially for balancing-type costs)

This is one reason two suppliers can offer the same headline unit rate but produce different total bills.

How do non-commodity costs show up on quotes?

You will usually see one of these patterns:

All-inclusive quote

You get one unit rate and one standing charge
The supplier is packaging non-commodity costs inside those rates

Pass-through quote

You get a unit rate (often described as the “commodity” element)
Non-commodity costs are charged separately, and can change over time

Neither approach is automatically better. The right choice depends on how predictable you want bills to be, and whether you have the appetite and capability to track and manage the moving parts.

How to compare quotes properly

Use this quick checklist:

Ask whether the quote is all-inclusive or pass-through
If it’s pass-through, ask for a clear list of pass-through items
Compare on total expected annual cost, using your own kWh
If you have half-hourly data, check whether time-of-use network charges could materially affect you
If your business is sensitive to bill volatility, prioritise contracts that reduce that exposure