Contract types, and how a fixed rate is built

Fully fixed is the most common choice among the businesses we work with, because it gives budget certainty. The trade is that the supplier prices in the risk of carrying the market. The value sits in fixing at the right moment and on the right terms.

Status: LawNetwork charges are regulated pass-through and reset every April. Some suppliers offer products that fix them for the term and some do not, and the position differs per product rather than per supplier.

We do not describe a supplier as fixing network charges without written confirmation for that supplier, that fuel and that product. Where we do not hold it, the position is recorded as unknown and the charge is treated as pass-through. Silence from a supplier is not a No, but it is not a Yes either.

Even on genuinely fully fixed products, some elements commonly remain pass-through. Exceeded capacity and reactive power charges are the usual two. A site can hold a contract correctly described as fully fixed and still carry those.

A supplier offering a fixed price is not pricing today’s wholesale cost. It is building a rate that has to cover every cost of delivering energy across the whole term, plus the risk of getting it wrong.

• Forward wholesale purchasing. The supplier buys the commodity ahead across the forward market, season by season, to cover expected usage for the term. The fixed rate blends all of those forward prices rather than a single day’s price.
• Network costs. Transmission and distribution charges to move the energy to the site, forecast across the term and built in.
• Policy and environmental levies. Renewables Obligation, Contracts for Difference, the Capacity Market, the Climate Change Levy, the Nuclear RAB levy and others, each forecast and included.
• Balancing and shaping. The cost of matching a specific usage pattern to supply in every half hour, and of keeping the system balanced.
• Margin and risk premium. Operating cost, profit, and a premium for carrying the risk that any of the above moves during the term.

Because the supplier buys forward, a fixed rate reflects the shape of the forward market on the day you agree it, not the current spot price.

The forward curve for future summers and winters can sit above or below today’s level. That is why a longer fix is sometimes cheaper and sometimes carries a premium, depending entirely on the shape at the time. We do not claim a long fix is automatically the right call, and we do not forecast where the curve goes next. We show what it is doing at the point of the decision.

The wholesale price gets the attention, but for a typical business electricity rate it is no longer the larger part. The charges stacked around it, network, policy and supplier costs, now make up the majority.

That is why a bill does not simply fall when the market does, and why changing supplier can only ever address part of the cost.

We do not publish a percentage split of a typical rate. The composition varies by site, voltage, consumption, region and contract, and a single set of percentages presented as typical would be quoted back as though it applied to a specific bill. We break the split down from your own invoices instead.

The direction is not in doubt. Non-commodity costs have grown substantially as a share of a business electricity bill over the past decade, and the April 2026 network charge increases moved them further. Gas is different: the commodity remains the larger share, so gas and electricity behave differently and are quoted and decided separately.

• Two offers with the same unit rate can carry materially different total costs, depending on what is fixed and what passes through.
• Ask what is fixed per product rather than per supplier, and get the answer in writing.
• Compare on total delivered cost with every line shown, not on the headline rate.
• Check the customer information document, not just the main terms. Where the two disagree, the customer information document governs, and it is the one carrying the rates.