Fixed vs. Fully Fixed contracts

Category: Utilities

All suppliers will offer you a “Fixed” contract, in that the unit rates and standing charge are fixed for the duration of your contract.

However, with business supplies there are additional factors + costs that are not necessarily controlled by the supplier. These are referred to as “Non-commodity” costs (i.e costs not related to the actual commodity being sold, electricity or Gas in this instance). There are quite a few different non-commodity costs, a lot which will only apply to certain types of supply or the commodity actually being sold.

A “Fully Fixed” contract is sold a little more expensive than a standard “Fixed” contract, with the idea being that any applicable “non-commodity” costs are also fixed for the duration of the contract. For more information on what charges may be applicable to your supply, you will need to talk to your supplier who will be able to advise.

Apart from being quite the collection of acronyms, most of these will not apply to supplies, but we are listing them for information’s sake…

Transmission Network Use of System (TNUoS) These charges recover the cost of installing and maintaining the transmission system in England, Wales, Scotland and offshore. It covers the cost of transmitting electricity from power stations to grid supply points across the high-voltage, high-volume transmission system

Distribution Use of System (DUoS) DUoS charges are levied by the UK’s regional DNOs (Distribution Network Operators). They contribute to the operation, maintenance and development of the UK’s electricity distribution networks It also covers the cost of distributing electricity from the national grid to your premises via a local distribution zone.

Climate Change Levy (CCL) This tax was put in place to encourage a reduction in carbon emissions. Every April this charge is reviewed and increases by a small amount, however this charge will increase when the CRC charge is abolished.

Balancing Service Use of System (BSUoS) BSUOS charges represent the costs incurred by National Grid for their actions in maintaining the balance of demand and quality and security supply on the network BSUoS charges are daily charges and are paid by suppliers and generators based on their energy taken from or supplied to the National Grid in each half-hour Settlement Period.

Capacity Market (CM) A scheme to secure additional winter capacity from both generators and Demand Side Response providers Successful bidders receive stable payments in return for commitment to deliver energy when required This is needed to help secure electricity supplies for the future. The subsidy payment for these generators is paid for by electricity consumers on their consumption in the winter period.

Feed-in-Tariff (FiT) FiT is a subsidy scheme introduced in 2010 to support small-scale renewable generation The subsidy payment for FiT generators is paid for by electricity consumers The approximate cost increase in 2016/17 was over 10%.

Feed-in-Tariff Contracts for Difference (FiTCfD) CfD generators have a contract with the government-appointed Low Carbon Contract Company (LCCC), guaranteeing them a fixed price for their exported electricity The subsidy payment for these generators is paid for by electricity consumers through their supplier This scheme has replaced the RO and FiT charges.