The Targeted Charging Review
The Targeted Charging Review (TCR) is a Significant Code Review (SCR) led by Ofgem that will change the way system and network costs are charged to UK energy consumers.
With a focus on making the Transmission Network Use of Service (TNUoS) and Distribution Use of Service (DUoS) charges fair and transparent, Ofgem has decided to levy all residual charges for end consumers.
What costs are changing?
- From April 2022 the recovery of DUoS charges moved to a new fixed charge.
- From April 2023 TNUoS will be moving to a new fixed charge.
- For business consumers, there will be a single set of transmission residual charges and a set of distribution residual charges for each of the 14 distribution licensed areas, for each fixed charging band.
Residual charges cover the cost of using the UK energy network, making up the main proportion of TNUoS and half of DUoS costs. The remaining proportion of these charges are forward looking costs to cover network growth and expansion.
Things to look out for:
- The price you pay for DUoS residual costs is now a fixed charge on your bill from April 2022 and for TNUoS from April 2023, but this will vary site by site basis based on a banding structure.
- Customers will see an increase in the standing charge they pay for DUoS and TNUoS, but a reduction in their unit rates.
- Customers will still receive an annual reconciliation for TNUoS, however this is likely to be a lot smaller than in previous years due to the new fixed component.
Each site has been assigned to a band, which was set by the Distribution Network Operators and is now fixed until 2026.
The bands are as follows, each band defined by your voltage level and capacity for larger consumers or net consumption volume for smaller consumers.
Want to know more about how your business will be impacted by TCR?
OEM is providing a no-obligation TCR report bespoke to your business where we identify the cost implications and how to sensitively reduce your consumption to a lower band.
Unsure of how this can affect your business please contact your Account Manager or contact us on firstname.lastname@example.org.