What really drives your electricity bill

Most people assume the price of electricity is the price of electricity. It is not. On a typical business bill in 2026 the wholesale commodity, the actual power your supplier bought, is only around 38 to 40 per cent of the total. The rest is a stack of network, balancing, policy and tax charges the supplier collects on behalf of the grid, the regulator and the government.

These charges are the same for every supplier, they reset each April, and they are the part of the bill that has grown for a decade. Understanding them changes the conversation from finding a cheaper unit rate to reducing the part of the bill that is actually large and rising.

Because the non-commodity stack is the larger share and is rising independently, a business can cut its consumption, hear that wholesale prices have softened, and still receive a bigger bill. The headlines track the smaller half. The half that is quietly growing is the one worth watching, and it is not the one a cheapest unit rate comparison shows you.

These charges are bundled into your unit rate and standing charge, or itemised on a half-hourly or pass-through contract. No supplier sets them and no supplier can remove them. Figures are the published position at the verification date and are re-checked each April.

Do not read the electricity split onto a gas bill. Gas is close to the mirror image: the wholesale commodity is the larger share, roughly a third to a half of the bill, and non-commodity costs are far lighter, commonly estimated at around 30 per cent. Gas carries network charges, CCL and the Green Gas Levy, but none of the heavy electricity policy stack. So for gas the wholesale price you hear about genuinely is most of the story. For electricity it is not. We never blend the two.

• You cannot switch these charges away. They are identical across suppliers. A cheaper supplier only ever competes on the wholesale portion and its own margin, not on the regulated pass-through.
• You can reduce the units they apply to. Most of the stack is charged per kWh, so cutting consumption through efficiency, waste analysis and on-site generation reduces the pass-through cost as well as the wholesale cost.
• You can right-size the fixed elements. The capacity charge and, increasingly, the TNUoS standing charge are billed on your agreed capacity regardless of use. A capacity review can cut a fixed cost you are paying for and not using.