Targeted Charging Review

The way we generate and use Electricity is changing, so the government has reviewed how network charges are collected, with an added focus on recovering a fair share from each customer. There have been winners and losers.

Network charges were previously heavily weighted towards when and how much energy was used, which allowed some companies to manipulate their demand to reduce their costs. This placed an additional financial burden on those that did not and resulted in a high degree of uncertainty throughout the industry.

There is now a greater emphasis on fixed charges based on the Banding in which the meter is placed, for both Transmission and Distribution costs. For meters with an Agreed Supply Capacity, this will determine their Band, whilst those without, will be based on their Annual Consumption.

Transmission charges are no longer mainly recovered via the Triads, but by this new fixed charge. From April 2024 most customers saw a reduction on the previous year, with forecast increases from April 2025. When looking at the regional Distribution charges, there are two main fixed elements. From April 2024 the Band fixed fee saw an increase for most customers with a reduction expected from April 2025.

The Available Capacity charge saw a small increase from April 2024, with a much larger increase due from April 2025. From April 2023 Balancing costs changed, so 100% is now recovered as an element within the Electricity invoice, rather than partially funded within the Wholesale cost.  In theory the total charge remains the same, but is more visible on the invoice. Costs from April 2024 are lower, with expected increases from October 2024.

Indigo Swan will continue to engage with energy suppliers and provide updates. We are more than happy to discuss how we can support you.

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