In the UK, an electricity supplier is a retailer of electricity. For each supply point the supplier has to pay the various costs of transmission, distribution, meter operation, data collection, tax etc. The supplier then adds in energy costs and the supplier's own charge.
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MSP and GSP
MSP kWh is the amount of electricity consumed at the 'meter supply point', which is the customer's meter. GSP kWh is obtained by multiplying the MSP kWh by the Line Loss Factor (LLF, a figure > 1) to include the amount of electricity lost when it is conducted through the distribution network, from the 'grid supply point' to the customer's meter. Some kWh elements of the bill are charged at MSP and some at GSP. The LLF for a particular supply depends on the DNO and the supply's characteristics and the time and date (day of week, season etc.).
The bill
The consumer pays the supplier according to an agreed tariff, possibly including pass-through costs. A pass-through cost is a cost that is charged to the energy supplier, but is then "passed through" directly to the consumer.
Transmission charges
Transmission charges, known as "Transmission Network Use of System" (TNUoS), are paid to National Grid to cover the expense of running the grid - either charged as TRIAD for large levels of demand, or based on usage between 4pm and 7pm for smaller demand levels. The charge for a supply is calculated at the end of the financial year by taking an average of the GSP kW at each of the three TRIAD times, and multiplying it by the rate (which varies by DNO).
RCRC
Residual cashflow reallocation cashflow (RCRC) covers balancing costs in the last 15 minutes before gate closure. The charge is for each half-hour, and may be positive or negative.
Distribution charges
The distribution charges, known as the "distribution use of system" (DUoS) charges, are paid to the distribution network operator (DNO) on whose network the meter point is located. The charges are:
Availability
Supply availability, otherwise known as "supply capacity" or "kVA", if represented by its measured units, is the maximum kVA power allowed for a particular supply in a particular network and is set before the supply is energised. It is a figure agreed between the consumer and the supplier (set to a level required by the consumer in almost all cases except where power distribution may be physically limited to the supply) at the start of the contract. This supply availability is charged for every month, in effect as a standing charge, despite the fact that the maximum demand recorded in the month may be lower. If the kVA supply availability figure is exceeded (breached, in effect) by the value of the measured monthly maximum demand, also in kVA for this purpose, the higher figure of kVA from the maximum demand may be charged instead of the supply capacity. The new elevated kVA charge figure (or the supplier's nearest higher capacity band figure, if capacity is only allowed in banded levels 50 kVA apart for instance) may stay as the chargeable figure for twelve months depending on the electricity distribution area. This can cause temporary unnecessary high billing, as if a penalty, if the breach was avoidable. Alternatively, the capacity charge can just return to the original availability figure in the subsequent month's bill. Determining the correct capacity figure to allow for the maximum demand required for the supply can be a fine judgement if the capacity charge is to be kept to a minimum, and vigilance of maximum demand and efforts to keep the power demand lower than the agreed capacity can be required to avoid triggering a higher capacity charge during the contract.
• Unit rates - these rates are split into 3 time periods; Red, Amber and Green. These charges vary per distribution company. Please see the chart below for the applicable time bands for each company.
Reactive power
This also varies with each distribution area, and is charged if the power factor for a supply is deemed too low.
Fixed charge
The fixed charge is in units of pence / MPAN / day.
Climate Change Levy
The Climate Change Levy is a p/kWh tax on certain electricity use. Exempt supplies include domestic supplies and supplies using less than the de minimis threshold of 1,000 kWh / month.
Energy charge
Energy charges pay per kWh (kilo watt hour).
Data collection charge
The data collection charge is a fee paid to the data collector for determining the energy consumption of the supply.
Meter operation charge
The meter operation charge is a fee paid to the meter operator for installing and maintaining the meter.
VAT
VAT is payable at the standard rate unless the supply meets certain conditions (e.g. domestic supplies, or supplies that use less than 1000 kWh per month) in which case they are charged at the Value-added tax (United Kingdom)#Rates of 5%.
Changing supplier
For a non-half-hourly supply, the NHHDC sets the change of supplier (CoS) read from a meter read, a customer read or a deemed read. A deemed read is one estimated by the NHHDC based on any previous or subsequent readings. A CoS read can be disputed up to final reconciliation. Final reconciliation is fourteen months afterwards. If a normal read comes in after final reconciliation that is lower than the CoS read, the new supplier should credit the customer.