A small business contacted us recently after spotting a worrying shift on its electricity bill: its standing charge had surged from roughly £35 to nearly £140.
That is an increase of around 300% — to the point where the business was paying more just to stay connected to the grid than for the electricity it actually consumed.
We are doing everything we can to cut our energy use, but when the fixed daily cost makes up the bulk of the bill, where is the incentive?
It is a fair question, and one more businesses will be asking this year.
Electricity bills aren't just about unit rates anymore
For years, energy procurement was simple: compare the unit rate in pence per kWh and pick the best deal. Today, that unit price only tells half the story.
Electricity bills also fund the physical network that moves power around the country, alongside various government schemes, metering fees and industry levies. Several of these underlying non-commodity costs are shifting sharply.
- Network upgrades (TNUoS). Transmission Network Use of System charges pay for Britain's high-voltage grid infrastructure. With significant investment underway to expand and reinforce the network for new generation, NESO's final figures for 2026/27 show the average Transmission Demand Residual tariff climbing by around 63% compared with 2025/26. Depending on your meter type, charging band and supplier, that often lands directly on the fixed standing charge.
- Policy levies. New costs are entering bills too, such as the Nuclear Regulated Asset Base (Nuclear RAB) introduced to help finance Sizewell C. Because Nuclear RAB is charged to suppliers based on volume rather than as a flat fee, a large standing charge hike should not be blamed entirely on new policy levies.
The penalty on efficiency
This shift hits energy-conscious organisations hardest. A business can invest in LED lighting, upgrade to efficient machinery, improve operational controls and cut power consumption significantly. Yet if the standing charge escalates at the same time, the actual savings on the bottom line largely evaporate. In the worst cases, fixed costs outstrip usage costs entirely.
Nobody is suggesting firms abandon energy efficiency. But it raises a serious question about whether the growing weight of fixed grid charges undermines the commercial case for using less power.
Look beyond the headline figures
Headline unit rates can be deceptive. Different suppliers package industry levies in different ways.
- Bundled or unbundled. Some suppliers bundle third-party charges directly into the unit rate, while others itemise and separate them.
- Fixed or pass-through. Some contracts fix these elements for the full duration of the term, whereas others pass regulatory adjustments straight through to the customer.
Two contracts with identical unit rates can deliver very different bottom-line costs depending on how fixed charges and pass-throughs are applied.
What to check now
If your electricity costs have jumped, take a closer look at the breakdown. Check how the standing charge has moved, confirm your charging band, and ask your supplier for a clear accounting of which industry fees have driven the change.
Energy contracts are growing more complex, but transparency should not be optional. If your standing charge has tripled, asking for an exact breakdown is the right place to start.
This article first appeared on LinkedIn.
Related reading: how we handle business gas and electricity contracts, commercial waste and wider utilities and operations, plus client case studies showing the outcomes.
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