Clear, jargon-free definitions of essential business energy terms. From kWh to MPAN, understand exactly what's on your energy bill and what the 2024 TPI regulations mean for you.
Pro tip: Use Ctrl+F (or ⌘+F on Mac) to quickly search for any term.
A kilowatt hour is the standard unit of measurement for energy consumption. It represents using 1,000 watts of power for one hour. Your business energy bill is typically calculated by multiplying your kWh usage by your unit rate (pence per kWh).
Example:
If you run a 2kW heater for 5 hours, you've consumed 10 kWh of energy.
A fixed daily fee charged by your energy supplier, regardless of how much energy you use. This covers the cost of maintaining your connection to the energy network and reading your meter. Charged in pence per day.
Example:
A standing charge of £0.50 per day equals £182.50 per year, even if you use zero energy.
The price you pay for each kilowatt hour (kWh) of energy you consume, typically shown in pence per kWh (p/kWh). This is the variable part of your bill that changes based on your usage.
Example:
At a unit rate of 24p/kWh, consuming 1,000 kWh costs £240.
The rates you pay when you are being supplied without any contract in place. Ofgem says a deemed contract normally arises when a customer moves into new premises and starts using gas or electricity without agreeing a contract, but it can also arise when an existing contract ends and the customer keeps consuming, where that contract does not say what happens next. Deemed rates are not the same as out-of-contract rates - Ofgem states that the two terms are not interchangeable - and they are usually far more expensive than a contracted fixed rate, because the supplier is taking on more risk.
Example:
You take over a shop unit and switch the lights on before signing anything. You are on a deemed contract, paying 34p/kWh instead of the 22p/kWh you could have fixed at.
A deemed contract is the energy supply agreement the law creates automatically when a business uses electricity or gas at a premises without having agreed a contract - most often after moving in, taking over a business, or a supplier failure. The Electricity Act 1989 says that where a supplier supplies a premises 'otherwise than in pursuance of a contract', it 'shall be deemed to have contracted with the occupier'; the Gas Act 1986 says the same for gas. The prices it carries are called deemed rates or a deemed tariff, and Ofgem says they are 'usually higher than negotiated contract rates'. A deemed contract has no fixed term, so you can leave it at any time by agreeing a contract or switching supplier.
Example:
You collect the keys to a cafe on Monday and open on Tuesday without calling anyone. From the moment you use the electricity, you have a deemed contract with whoever already supplies the meter, at its deemed rates.
Out-of-contract rates are the prices you move onto when your fixed-term contract ends and you have not renewed or switched. Ofgem defines them as the rates customers are put onto, as defined by the terms of their contract, when the contract continues to apply after the fixed term has expired. They are not the same as deemed rates, which apply when no contract was ever agreed: Ofgem says the two terms 'are not interchangeable', and its deemed-rate rules in Standard Licence Condition 7 do not cover out-of-contract rates. Some suppliers publish them as separate tariffs, sometimes under a friendlier name such as EDF's Freedom for Business. They are variable, usually among the most expensive prices a supplier charges, and you stay on them until you act - but unlike a rollover, which renews you onto a new fixed term, you can switch away at any time. In October 2026, the out-of-contract electricity rates Drax, EDF and npower published for a standard business meter ran from 42.30p to 53.38p per kWh.
Example:
Your two-year fix at 23p/kWh ends in April and the renewal letter goes unread. From April the contract's own terms move you onto the supplier's out-of-contract rate - a price you never agreed to - until you agree a new deal or switch, which you can do immediately.
The way suppliers buy energy in advance to lock in a price, instead of buying it on the day you use it. When you sign a fixed contract, the supplier goes into the wholesale market and buys roughly the amount of gas or electricity it expects you to use over the term. That purchase is what makes your fixed rate possible. It also explains two things businesses find odd: why a supplier will not simply move you to today's cheaper price mid-contract, and why leaving early or using far more or less than forecast can trigger charges - the supplier is already committed to energy it bought on your behalf.
Example:
You sign a two-year fixed deal in March. Your supplier buys most of that energy up front at March prices. If wholesale prices fall in June, your rate does not fall with them, because the energy behind your contract was already bought.
Non-energy costs - mainly network charges for the national and local grid (TNUoS and DUoS), plus some balancing and government scheme costs - that a supplier passes on to you at the rate it is charged, instead of fixing them in your price. On a pass-through contract they appear as separate lines on your bill and can change during the contract; on a fully fixed contract the same costs are built into your unit rate and standing charge and cannot change.
Example:
Your bill shows a DUoS line and a TNUoS line under 'pass-through charges'. When the network operator raises its charges in April, those lines go up even though your unit rate is fixed.
A business energy contract that fixes every part of the price - wholesale energy, network charges and policy costs - in the unit rate and standing charge for the whole term. It is the opposite of a pass-through contract, where only some costs are fixed and charges such as network costs are passed through at whatever rate applies. The headline unit rate can look the same on both, so check which type you are being quoted.
Example:
Two quotes both say 24p/kWh fixed for two years. One is fully fixed; the other passes network charges through. If network charges rise next April, only the second bill goes up.
All the costs on your business energy bill that aren't the wholesale energy itself. Non-commodity charges can make up a significant proportion of your total electricity bill and include network charges (DUoS, TNUoS), policy costs (RO, FiT, CfD, CCL), balancing charges (BSUoS), capacity market charges, and supplier margins. These charges are largely fixed by regulators and network operators - your supplier has no control over them. When comparing quotes, the unit rate you see already includes non-commodity charges baked in, which is why rates are much higher than the raw wholesale price.
Example:
Wholesale electricity costs 8p/kWh, but your unit rate is 24p/kWh. The 16p/kWh difference is non-commodity charges: network costs, environmental levies, capacity charges, and supplier margin.
An automated payment method where your energy supplier collects payment directly from your bank account on a set date each month. Reduces the supplier's risk of late or missed payments, often resulting in lower deposit requirements or better contract terms. Most suppliers prefer Direct Debit over invoice payment.
Example:
By setting up a Direct Debit, your supplier may waive a £3,000 security deposit requirement because they have guaranteed monthly payment collection.
The usage limit up to which HMRC treats a supply as domestic use, even when the customer is a business, so it gets the reduced VAT rate instead of the standard 20%. For electricity: not more than an average of 33 kWh a day (1,000 kWh a month). For gas: not more than an average of 145 kWh a day (4,397 kWh a month), charged at 5%. The limit applies at each premises, counting everything the same supplier provides there, and is averaged over each bill. Electricity within the limit is charged 5%, except in Great Britain from 1 October 2026 to 31 March 2027, when it is zero-rated (0% VAT). No VAT declaration certificate is needed - HMRC says supplies within the limits should be taxed at the reduced rate - so if your bill shows 20%, ask your supplier to correct it.
Example:
Your small office uses 800 kWh of electricity per month - within the 1,000 kWh de minimis limit - so the supply is treated as domestic use: 0% VAT in Great Britain from 1 October 2026 to 31 March 2027, and 5% otherwise, instead of 20%.
A business (commercial) electricity meter is the meter that measures the electricity used at non-domestic premises. What makes it a business meter is usually how it is registered, not the hardware: its MPAN carries a non-domestic profile class - 03 for a single-rate meter or 04 for a two-rate meter, which Elexon calls 'Non-Domestic Unrestricted Customers (Single Rate)' and 'Non-Domestic Economy 7 Customers (Two Rate)' - or 00 if the meter is half-hourly. Most small businesses have a standard, smart or AMR meter on a whole-current supply; larger sites have half-hourly meters, often with current transformers (CT meters).
Example:
The MPAN on your bill starts with 03, so your shop has a single-rate non-domestic meter. If it started with 00, the meter would be half-hourly.
A unique 13 or 21-digit reference number that identifies your electricity supply point. Essential for switching suppliers and managing your electricity connection. Found on your electricity bill.
Example:
A 13-digit MPAN looks like this: 1234 5678 9012 3
A unique 6 to 10-digit reference number that identifies your gas supply point. Used for switching gas suppliers and managing your gas connection. Found on your gas bill.
Example:
An MPRN looks like this: 1234567890
A digital meter that automatically sends your energy usage readings to your supplier in near real-time, eliminating the need for manual meter readings. Provides half-hourly data for business electricity customers.
Example:
With a smart meter, your supplier receives your usage data every 30 minutes automatically.
Advanced metering that records electricity consumption in 30-minute intervals throughout the day. Mandatory for businesses using over 100kW (typically annual consumption over 250,000 kWh). Allows for time-of-use pricing.
Example:
Your HH data shows you used 15 kWh between 9:00-9:30am and 8 kWh between 9:30-10:00am.
Standard metering for smaller business customers (typically under 100kW demand). Energy consumption is estimated using industry-standard profiles until actual readings are taken. Being phased out by Market-Wide Half-Hourly Settlement (MHHS) by mid-2027.
Example:
Your NHH meter is read quarterly, with estimated bills in between.
A meter setup that can send readings automatically (often daily) but does not provide full smart meter functionality like half-hourly settlement, remote configuration, or interoperability through the national smart metering network. AMR is common in older non-domestic installations and typically offers fewer tariff and analytics options than a smart meter.
Example:
Your supplier receives regular reads from an AMR meter, but you can't access half-hourly pricing because the site isn't settled half-hourly.
A classification system used to categorise electricity meters based on the customer's typical usage patterns. Identified by the first two digits of your MPAN. Profile Class 03 is standard non-domestic (single rate), Class 04 is non-domestic Economy 7 (day/night rates), and Class 00 is half-hourly metered (typically large users over 100kW). Your Profile Class determines how your supplier estimates and settles your usage.
Example:
Your MPAN starts with '03', meaning you're on Profile Class 03 - a standard non-domestic meter with estimated billing.
A 3-digit code that appeared in the top line of your MPAN, indicating your meter's time-switching configuration (e.g., single rate, day/night, Economy 7). Since September 2025, the MTC is being replaced by the 4-digit Standard Settlement Configuration (SSC) as meters migrate to Market-wide Half-Hourly Settlement (MHHS). Non-migrated meters still display the original MTC format.
Example:
An MTC of 845 indicates a specific meter configuration. After MHHS migration, this becomes a 4-digit SSC like 0845.
A 4-digit code that replaces the old 3-digit Meter Timeswitch Code (MTC) in your MPAN top line under Market-wide Half-Hourly Settlement (MHHS). The SSC specifies the number of registers your meter has and the times each register records electricity usage. This change, implemented from September 2025, adds one digit to the MPAN top line (from 8 to 9 digits).
Example:
Your MPAN top line changed from '03 845 100' (8 digits) to '03 0845 100' (9 digits) after MHHS migration, with the SSC replacing the MTC.
A two-rate electricity setup with a cheaper night rate for a fixed number of hours (commonly 7 hours overnight) and a higher day rate. For many SMEs that operate mainly in daytime hours, Economy 7 can be expensive because day rates tend to be higher to offset the night discount.
Example:
A standard office using most electricity between 9am-5pm can pay more on Economy 7 because the daytime unit rate is higher.
A multi-rate electricity setup that provides around 10 hours of cheaper electricity spread across multiple windows (often overnight plus afternoon and evening). It can be useful for specific load patterns but is frequently misunderstood and can be harder to compare or switch away from.
Example:
A site with storage heating can benefit from Economy 10, but a typical office may pay more if most usage falls in the higher-rate windows.
The two generations of smart meter technology in the UK. SMETS1 (Smart Metering Equipment Technical Specifications 1) were early smart meters that sometimes lost connectivity when you switched supplier. SMETS2 meters are the current standard with improved interoperability - they communicate via the DCC network and remain 'smart' regardless of which supplier you use. Most SMETS1 meters are now being upgraded remotely to work like SMETS2.
Example:
Your old SMETS1 meter went 'dumb' when you switched from British Gas to EDF. The DCC is now remotely upgrading it so it works properly again.
The central organisation that operates the UK smart metering communications network. The DCC provides secure connectivity between smart meters, suppliers, and authorised market participants, so meters can send readings and (where supported) receive remote updates. This is why SMETS2 meters typically remain smart when you switch supplier.
Example:
Your supplier can retrieve smart meter reads via the DCC network without needing your business Wi‑Fi.
The pattern of your electricity usage over time, typically shown as a graph of consumption across each half-hour of the day. Your load shape determines whether you're a 'peaky' user (high consumption at expensive peak times like 4-7 PM) or a 'flat' user (consistent usage throughout the day). Under MHHS, your load shape directly affects your costs.
Example:
A restaurant has a 'peaky' load shape with low usage until 4 PM, then high consumption during dinner service until 10 PM.
A charge added to your electricity contract to account for the difference between a flat baseload price and your actual half-hourly consumption pattern. Wholesale energy is often purchased as a flat block (the same price every half-hour), but real businesses use more energy at some times than others. The shape fee covers the cost of buying additional energy during expensive peak periods and selling back surplus during cheaper off-peak periods. It is a component of non-commodity charges and typically appears as a separate line item on larger business contracts.
Example:
Your supplier bought your energy as a flat 20p/kWh block, but your factory uses most of its power during the 4-7 PM peak when wholesale prices are 35p/kWh. The shape fee of 1.2p/kWh covers that mismatch.
The organisation responsible for operating the Balancing and Settlement Code (BSC) in the UK electricity market. Elexon manages the systems that calculate how much energy each supplier has bought and sold, and is the delivery body for the Market-wide Half-Hourly Settlement (MHHS) programme.
Example:
Elexon's systems will process your half-hourly smart meter data to settle your electricity account under MHHS.
The legal framework governing how electricity is traded and settled in the UK. The BSC sets the rules for market participants including suppliers, generators, and licensed agents such as Meter Operators (MOPs), Data Collectors (DCs), and Data Aggregators (DAs). Managed by Elexon, the BSC defines the procedures for appointing and changing metering agents - which is how businesses can choose their own MOP and DC/DA providers rather than accepting supplier defaults.
Example:
Under BSC procedures, you can appoint your own Meter Operator by notifying your supplier and following the standard change-of-agent process.
An electricity tariff structure where unit rates vary depending on when you use power. Typically cheaper during off-peak hours (overnight, weekends) and more expensive during peak demand (4-7 PM on weekdays). MHHS enables more sophisticated ToU pricing by providing accurate half-hourly consumption data.
Example:
On a ToU tariff, you pay 15p/kWh for electricity used at 3 AM but 35p/kWh for electricity used at 6 PM.
The process of calculating how much energy each supplier has bought and sold, and reconciling payments between market participants. Currently, most SMEs are settled using estimated 'profiles'. Under MHHS, all meters will be settled on actual half-hourly data, meaning suppliers pay for exactly what their customers used, when they used it.
Example:
Under the old settlement system, your supplier assumed you used power evenly throughout the day. Under MHHS, they'll see you actually use 80% of your power between 5-8 PM.
The licensed agent responsible for installing, maintaining, testing and commissioning your electricity meter (being renamed MOA, Meter Operating Agent, under MHHS). Your supplier appoints one for each meter, and on half-hourly meters you can arrange your own instead. Default charges can be significant: npower Business Solutions' published terms set its default half-hourly meter operator and meter asset charge at £300 to £900 a year per meter depending on the meter's class, plus £345 a year for data collection and aggregation (prices effective from October 2016), and say customers may be able to reduce them by agreeing terms in writing. On most non-half-hourly meters the cost is built into your unit rate and standing charge.
Example:
Your half-hourly bill shows a separate 'MOP' line. That is the meter operator's charge. Ask your supplier whether it is a default rate and whether a written agreement, or appointing your own meter operator, would cost less.
A meter operator agreement is the contract for metering services - installing, maintaining and testing your electricity meter - between a business and a meter operator, or between a business and its supplier. Half-hourly sites are the ones that usually need one: if you have no agreement in place when your supply starts, your supplier appoints a meter operator itself and charges its default metering rates. npower Business Solutions' metering terms, for example, apply where you 'do not have an agreement in place with any suitable person for the provision of some or all of the Metering Services', and say you may be able to reduce the charges by entering into a written agreement. The Association of Meter Operators lists accredited meter operators you can get quotes from. Standard (non-half-hourly) meters rarely need a separate agreement, because the supplier arranges metering and builds the cost into your rates.
Example:
Your half-hourly bill shows a 'MOP' charge you never agreed. Ask your supplier whether it is a default rate, then get quotes from accredited meter operators and compare them before signing a meter operator agreement. Not sure what meter you have? Meet George's free bill check reads your meter type from your bill.
Two separate licensed roles in the electricity market. The Data Collector (DC) reads your half-hourly meter remotely, validates the data, and ensures accuracy. The Data Aggregator (DA) combines half-hourly data from multiple sites and submits it to Elexon for settlement. Under MHHS, these roles are being restructured into SDS (Smart Data Services) for smart meters and ADS (Advanced Data Services) for advanced meters. Like MOP charges, you can appoint your own DC/DA rather than accepting the supplier's default.
Example:
Your DC remotely collects 17,520 half-hourly readings per year from your meter. The DA aggregates this data and submits it to Elexon so your supplier is billed correctly for your usage.
A type of electricity meter used for larger business connections (typically above 100A). CT meters use current transformers to step down high electrical currents to measurable levels. Unlike whole current meters (used for smaller supplies), CT meters have an agreed Maximum Import Capacity (MIC) with the DNO and attract capacity/availability charges. Not all half-hourly metered sites have CT meters - many smaller businesses use whole current meters which do not attract capacity charges.
Example:
Your warehouse has a CT meter with a 100 kVA agreed capacity. You pay availability charges based on this capacity whether you use it or not. A small office next door has a whole current meter with no capacity charges.
Energy contract terms are the rules of your supply deal: the type of price you're on, how long it lasts, what fees can apply, and what happens when it ends. Ofgem says that before you agree a business energy contract, you should know six things - and each one has its own term in this glossary.
One rule is missing on purpose: there is no cooling-off period once you agree a business energy contract, so read the terms before you sign, not after.
Not sure what your current contract says? Upload your latest bill and Meet George finds your contract end date, spots deemed and out-of-contract rates, and tells you whether you're in your switching window.
Sources: Ofgem, Get a business energy contract; Ofgem, Non-Domestic Market Review factsheet (April 2024).
An energy contract with a set unit rate and standing charge that remains unchanged for a specific period (typically 1-5 years). Protects you from wholesale price increases but often includes early termination charges if you leave before the end date.
Example:
A 3-year fixed contract at 23p/kWh means your rate stays at 23p/kWh for the entire 3 years.
An energy contract where your rates can change periodically based on wholesale market prices. Offers potential savings when prices fall but exposes you to price increases. Also called 'variable' or 'tracker' contracts.
Example:
Your flexible contract rate dropped from 24p/kWh to 21p/kWh this quarter as wholesale prices fell.
A fixed-term business energy contract that includes a term requiring the customer to have, or agree to have, a smart or advanced meter installed. The government confirmed on 1 September 2026 that from 1 September 2027 every new fixed-term contract for a small or medium non-domestic site must include that term, with suppliers bound by a legally binding consumer protection code that stops customers being penalised for installation delays outside their control. Suppliers must start telling customers about the change from 1 January 2027.
Example:
Your café's fixed contract ends in October 2027 and you have an old non-smart meter. To sign a new fixed-term deal, you agree to have a smart meter fitted; if your landlord delays the installation, the code says you should not be penalised for it.
The short summary document a supplier gives you setting out the key terms of your energy contract - the unit rate, the standing charge, the contract length and the start date - before or at the point you sign. It is not the full contract, which runs to many more pages; it is the at-a-glance version. It matters for one reason above all: since 1 October 2024 Ofgem's supply licence conditions require suppliers to show every non-domestic customer the third-party intermediary service fee as a cost per unit in the Principal Terms, and on request. Ofgem's decision is explicit that there is no licence requirement for that fee to appear on your bills, so the Principal Terms is usually the only place you will ever see it written down.
Example:
Your renewal pack includes a two-page Principal Terms sheet showing 26.4p/kWh, a 62p daily standing charge, a 24-month term - and, in a line most people skip, a third-party service fee of 1.8p/kWh included in that unit rate.
A charge imposed by your supplier if you end your fixed-term contract before the agreed end date. Typically calculated per meter or as a percentage of remaining contract value. Can be several hundred to thousands of pounds.
Example:
Leaving your 3-year contract 1 year early costs £500 per meter in termination fees.
The period after you request a switch during which your current supplier can object to the transfer if there are valid reasons, such as outstanding debt or contract disputes. Typically 10-15 working days for electricity and 15-20 working days for gas. If no objection is raised, the switch proceeds automatically.
Example:
Your electricity switch was requested on April 1st; your current supplier has until approximately April 17th (10-15 working days) to object.
A document you sign authorising a new supplier or broker to act on your behalf to switch your energy supply. Essential for business energy switching. Meet George's LOA simply authorises us to complete your switch - you're never locked in. However, some traditional brokers use LOAs that tie you into long-term brokerage agreements, so always read carefully before signing.
Example:
You sign Meet George's LOA allowing us to switch your energy supply to a cheaper supplier. You can cancel at any time with no penalties.
A Letter of Authority that only grants a broker permission to access your meter data and fetch energy quotes on your behalf. Crucially, a Level 1 LOA does NOT give the broker 'Signing Authority' - they cannot sign contracts, renew agreements, or make changes to your supply without your explicit written consent for each transaction. This is the safer option when working with brokers.
Example:
With a Level 1 LOA, your broker can show you quotes from 10 suppliers, but you must personally approve and sign the final contract.
A Letter of Authority that grants a broker 'Signing Authority' to act on your behalf, including signing new contracts or renewals without showing you the terms first. This is high-risk for businesses as brokers can legally commit you to multi-year contracts with embedded commissions. Many SMEs sign Level 2 LOAs unknowingly and discover years later that their broker renewed them onto expensive rates.
Example:
Your broker used their Level 2 LOA to sign a 3-year renewal on your behalf at 28p/kWh, including an undisclosed 3p/kWh commission, without ever showing you the contract.
The specific period before your energy contract ends during which you can negotiate a new deal or switch suppliers. Typically 60-120 days before the contract end date. Missing this window may result in automatic renewal, being locked in for another term, or rolling onto expensive deemed rates. Suppliers are required to notify Microbusinesses about their renewal window.
Example:
Your contract ends on 1st March. Your renewal window opens on 1st November (120 days before), giving you 4 months to compare quotes and switch.
A contract clause that automatically extends your energy agreement for another fixed term (often 12-24 months) unless you actively opt out or switch before the renewal window closes. For Microbusinesses, Ofgem rules now prevent suppliers from auto-renewing onto another long fixed term without express consent - but brokers with Level 2 LOAs can still trigger renewals on your behalf.
Example:
You forgot to review your contract before the window closed, and the auto-renewal clause locked you into another 2 years at the same rate plus a new broker commission.
When your fixed-term energy contract expires and you haven't actively switched or renewed, your supplier moves you onto a new rate - typically higher than your original deal but lower than deemed rates. Also called a 'rollover rate'. Unlike deemed rates (which apply when there is no contract at all), a rolled-over contract is still a contractual arrangement, just not one you actively negotiated - and it is a separate thing again from out-of-contract rates, which is where your old contract's own terms keep applying after the fixed period ends. Ofgem's rules stop a microbusiness being put on a rollover contract lasting more than 12 months.
Example:
Your 2-year fixed contract at 23p/kWh ended in January. You didn't switch, so your supplier rolled you onto 31p/kWh - a 35% increase for the same energy.
The information a supplier has to put in front of a microbusiness so it knows its fixed deal is running out. Under Ofgem's supply licence conditions, where a supplier has a fixed-term microbusiness contract it must show, prominently and in plain and intelligible language, on every bill and statement of account: the date the fixed term is due to end, and - where the contract can be extended - a statement that the customer can write in before the end of the term to stop the supplier extending it. If your business is too big to count as a microbusiness, you get none of this by right, so the contract end date is yours to track.
Example:
Your bill carries a line saying your fixed term ends on 31 March and that you can write in before then to stop it being extended. That line is not a courtesy - it is a licence requirement for microbusiness fixed-term contracts.
An arrangement where the energy contract for a building is in the landlord's name and tenants are recharged for their share, rather than each tenant holding a supply contract directly with a supplier. Because the landlord is the supplier's customer, the tenant usually cannot switch, cannot see the underlying rates, and has no direct relationship with the supplier to query a bill. It is common in serviced offices, shared units, and premises where a tenant's space is not separately metered.
Example:
You rent a unit in a converted mill. There is one meter for the whole building in the landlord's name, and your quarterly service charge includes an energy figure. You cannot switch supplier, because you are not the supplier's customer.
A clause in a fixed-price contract (also called 'take or pay') that lets the supplier charge you if your actual usage moves too far from the Estimated Annual Consumption (EAC) your price was based on. The allowed range is a percentage either side of your EAC - Drax's SME terms use 10% if the contract sets no other figure. The charge is usually the price difference on the energy outside the band (for example, what the supplier paid against what it can resell surplus energy for), not your full unit rate, but each supplier sets its own formula.
Example:
Your EAC is 20,000 kWh with a 10% band, so the bottom of the band is 18,000 kWh. If you use 15,000 kWh, a tolerance charge can apply to the 3,000 kWh shortfall.
A classification for larger, more complex business energy customers - typically manufacturing plants, hospitals, data centres, or multi-site retail chains. I&C customers usually have half-hourly metering, consume over 100,000 kWh annually, and may have on-site generation, battery storage, or demand-side response capabilities. Unlike typical SMEs who buy energy as a simple commodity, I&C customers often require strategic energy management and may benefit from traditional broker services.
Example:
A 24/7 factory with half-hourly meters, rooftop solar, and a 500kW demand profile is classified as an I&C customer. They need unbundled contracts and peak avoidance strategies that most SMEs don't require.
A small business that qualifies for enhanced consumer-style protections under Ofgem regulations. To qualify, a business must meet at least one of these criteria: fewer than 10 employees, annual turnover or balance sheet under €2 million, or annual energy consumption under 100,000 kWh (electricity) or 293,000 kWh (gas). Microbusinesses receive clearer contract terms, protection from unfair practices, and access to the Energy Ombudsman for disputes.
Example:
A coffee shop with 4 employees using 25,000 kWh per year qualifies as a Microbusiness and can complain to the Energy Ombudsman if treated unfairly.
The Office of Gas and Electricity Markets - the UK's independent energy regulator. Protects consumers by setting rules for energy suppliers, managing licences, and enforcing market standards. Does not set energy prices directly.
Example:
Ofgem introduced the energy price cap for domestic customers in 2019 and TPI transparency rules for business energy in 2024.
The price energy suppliers pay to purchase gas and electricity from generators and traders on the wholesale market before selling it to consumers. Fluctuates based on supply, demand, weather, and geopolitical factors. Major component of your energy bill.
Example:
When wholesale gas prices spiked in 2022, business energy rates increased significantly.
A major regulatory programme requiring all UK electricity meters to be settled based on actual half-hourly consumption data rather than estimated profiles. Central systems went live on 22 September 2025 and Elexon, which delivers the programme under Ofgem direction, expects to complete migration in May 2027. Creates 'winners' (off-peak users) and 'losers' (peak-time users) as pricing shifts from averages to actuals. Separately, from 1 September 2027 new fixed-term contracts for small and medium business sites must include a term that the customer has, or agrees to have, a smart or advanced meter (see Smart-Contingent Contract).
Example:
Under MHHS, a bakery starting at 4 AM pays less than a restaurant firing up ovens at 6 PM - even if both use the same total kWh.
A code within the Retail Energy Code (REC) that sets the minimum standards energy suppliers and their agents must follow when installing and managing smart and advanced meters. It consolidates several older metering codes into one document and applies to installations at domestic and microbusiness premises. CoMCoP is the source of the existing microbusiness protections that continue to apply alongside the new 2027 smart-contingent contract rules.
Example:
When a supplier installs a smart meter at a corner shop, the installer must follow CoMCoP standards on safety, data handling, and the information the customer is given.
A centralised digital framework - being built by the Retail Energy Code Company (RECCo) with partners Raidiam and PayPoint - that is set to replace paper Letters of Authority and verbal consent scripts with a token-based digital permission model for sharing energy data. The customer grants, reviews, renews and revokes access through a single interface, and holds the access key rather than the broker. The domestic Minimum Marketable Product is planned for March 2027; the non-domestic version (which is what replaces business Letters of Authority) is expected to follow later, with timing still to be confirmed.
Example:
Instead of signing a broker's Letter of Authority, a business owner would grant a digital CCS permission token that they can review and revoke at any time.
A programme led by the Department for Energy Security and Net Zero (DESNZ), governed through the Retail Energy Code and enforced via Supplier Licence Condition SLC11C, requiring electricity suppliers to publish tariff pricing data through a standardised, machine-readable API. Phase 1a (planned for February 2027) covers public, published tariff pricing. Phase 1b (planned for November 2027) extends to consumer-specific tariff data and is designed to sit behind a Consumer Consent Solution (CCS) permission token. Together they make standardised, automated tariff comparison possible.
Example:
Under Tariff Interoperability, a switching platform could read a supplier's published prices directly via API rather than scraping a website or phoning for a quote.
A standardised 'data socket' that lets one piece of software request information from another in a structured, machine-readable format. In energy, an API lets a switching platform or app pull tariff prices or meter data directly from a supplier's systems, rather than a person reading a PDF, web page, or price-book spreadsheet and re-typing the numbers. The Tariff Interoperability programme makes published tariff data available through a mandatory, standardised API.
Example:
Instead of phoning a supplier for a quote, a switching platform can call the supplier's pricing API and get the rates back instantly in a format software can read.
The company responsible for operating and maintaining the local electricity distribution network in your area. There are 14 DNO regions across Great Britain, owned by six different groups. Your DNO delivers electricity from the National Grid to your premises and charges DUoS fees for this service.
Example:
UK Power Networks is the DNO for London and the South East; Scottish Power Energy Networks covers central and southern Scotland.
A company licensed by Ofgem to own and operate a smaller, localised electricity distribution network - typically serving new housing developments, business parks, or commercial sites. Unlike the 14 regional DNOs, IDNOs manage more targeted networks. You can tell if your supply is on an IDNO network by the first two digits of your MPAN bottom line: DNOs use distributor IDs 10-23, while IDNOs use 24 and above. Being on an IDNO network can sometimes mean higher standing charges or fewer supplier options, similar to how IGT gas networks work.
Example:
A new business park can be built with an IDNO network managed by Independent Power Networks (distributor ID 24). Your MPAN bottom line would start with '24' instead of a DNO code like '12'.
A 3-character code in the MPAN top line that categorises your electricity supply point by type and voltage level. It determines two things: the Line Loss Factor (a multiplier accounting for electricity lost as heat in the cables between the grid and your meter) and your DUoS tariff band. The code can be alphanumeric (letters and numbers). Under MHHS, the LLFC field is being replaced by the DUoS Tariff ID, which serves a similar role but maps directly to your distribution charging band.
Example:
An LLFC of '100' in your old MPAN top line categorised your connection for line loss calculations. After MHHS migration, this field becomes a DUoS Tariff ID that maps to your DNO's distribution charging band.
The organisation responsible for operating Britain's electricity and gas systems in real-time, ensuring supply meets demand every second of every day. Formerly part of National Grid, NESO became an independent public corporation in 2024. Energy suppliers must notify NESO of their expected demand, and NESO uses the Balancing Mechanism to correct any mismatches between supply and demand.
Example:
Your supplier tells NESO they expect their customers to use 500MW between 5-6pm. If actual usage is 520MW, NESO activates the Balancing Mechanism and the supplier pays imbalance charges.
Your forecasted electricity usage for the next 12 months, measured in kWh. Suppliers use your EAC to calculate quotes and determine how much energy to purchase on the wholesale market. EAC is typically based on historical meter readings, but can be adjusted for expected changes in your business. Getting your EAC wrong can trigger Volume Tolerance penalties if actual usage differs significantly from the estimate.
Example:
Based on last year's readings, your EAC is 25,000 kWh. Your supplier commits to buying this volume upfront. If you only use 18,000 kWh (28% under), you may face Take-or-Pay charges.
Your forecasted gas usage for the next 12 months, measured in kWh. The gas equivalent of EAC (Estimated Annual Consumption) for electricity. Your AQ is calculated by Xoserve, the gas industry's central data service, from historical meter readings, and is used by suppliers to quote prices and purchase gas on the wholesale market. It may be shown on your gas bill alongside your MPRN. If your business circumstances change significantly (expansion, downsizing, efficiency improvements), you can request an AQ amendment from your supplier.
Example:
Your gas bill shows an AQ of 45,000 kWh. If you've installed a new efficient boiler that reduces usage by 20%, you should request an AQ amendment to 36,000 kWh to avoid Volume Tolerance penalties.
The price at which energy suppliers can sell excess electricity back to the grid when they have bought more than their customers used. The System Sell Price is typically lower than the System Buy Price (what suppliers pay to buy extra power), meaning suppliers lose money when they're 'long' on power. This price asymmetry is why Volume Tolerance clauses exist - suppliers need protection against customers using significantly less than forecast.
Example:
Your supplier bought power at 20p/kWh for you. You used 20% less than expected, so they had to sell the excess back at the System Sell Price of 12p/kWh - an 8p/kWh loss on every unused unit.
Fees charged by your local distribution network operator (DNO) for transporting electricity through the local network to your premises. Based on your consumption and demand. Passed through to you by your supplier.
Example:
Your bill shows £78 in DUoS charges for using the local electricity network this month.
Fees for using the national high-voltage electricity transmission network to transport power across the UK. Charged to larger business users (typically HH metered). Varies by location and time of use.
Example:
Northern businesses often pay lower TNUoS charges than those in the South due to proximity to generation.
The three half-hour periods of highest national electricity demand each winter (November to February), used historically to calculate TNUoS demand charges for half-hourly metered businesses. If your business was consuming electricity during a Triad period, you were charged the full locational TNUoS demand tariff for that peak. However, Ofgem's Targeted Charging Review (TCR) in April 2023 largely reformed this system - 80-90% of TNUoS demand charges were moved to fixed capacity bands based on your voltage level and agreed capacity, rather than Triad-based billing. This means Triads are far less significant for most businesses than they used to be.
Example:
Before April 2023, a factory running at full capacity during a Triad period could face thousands of pounds in TNUoS demand charges. After TCR reform, most of that charge is now a fixed band based on your connection size, regardless of when you use electricity.
The high-pressure gas pipeline network that transports natural gas across Great Britain, operated by National Gas Transmission. NTS charges cover the cost of moving gas from entry points (terminals, storage, interconnectors) to local distribution networks. These charges are typically bundled into your gas unit rate but may appear as separate line items on detailed commercial invoices.
Example:
Your detailed gas invoice shows 'NTS Entry Capacity' and 'NTS Exit Capacity' charges - these are the costs of using the national gas transmission network.
One of 13 geographic regions in Great Britain where gas is distributed through lower-pressure pipelines from the National Transmission System to end customers. Each LDZ is operated by a Gas Distribution Network (GDN) and has its own transportation charges. LDZ charges are typically bundled into your gas unit rate but may appear separately on detailed invoices as 'LDZ Capacity' or 'LDZ Commodity' charges.
Example:
Your business is in the 'North West' LDZ operated by Cadent. The LDZ charges on your bill reflect the cost of distributing gas through the local network to your premises.
Charges levied by the National Energy System Operator (NESO) to recover the costs of balancing electricity supply and demand in real-time. From October 2025, BSUoS rises from 1.074p/kWh to 1.569p/kWh - a 46% increase. These costs flow through to business bills via supplier tariffs.
Example:
The October 2025 BSUoS increase adds approximately £123 per year to a business using 25,000 kWh annually.
A government tax on business energy consumption introduced under the Finance Act 2000 to incentivise carbon reduction. The CCL appears as a separate line item on business energy bills. The main rate from 1 April 2026 is 0.801p/kWh for both electricity and gas - the same rate on each fuel - rising to 0.827p/kWh on 1 April 2027. Relief applies to charities for non-business use and to supplies within the de minimis limits (for electricity, averaging not more than 1,000 kWh a month), which fall outside the main rates automatically with no certificate needed. Businesses with a Climate Change Agreement pay a reduced rate: a 92% discount on electricity and 89% on gas. Renewable electricity is not exempt - the REGO-based exemption ended on 1 August 2015.
Example:
A business using 50,000 kWh of electricity annually pays approximately £400.50 in CCL (50,000 × 0.801p), plus VAT on top.
A government scheme that obliges every licensed electricity supplier to source a set share of the electricity it supplies from renewable generation. Suppliers either present Renewables Obligation Certificates (ROCs) issued to generators, or pay a buy-out price instead. Ofgem set the buy-out price at £69.34 per certificate for 2026/27, and DESNZ set the obligation at 0.472 certificates per MWh in Great Britain (0.184 in Northern Ireland). From 1 April 2026 the government moved 75% of the Renewables Obligation cost on domestic supply to general taxation. Business supply was not included, so business electricity still carries the full amount.
Example:
At £69.34 x 0.472 certificates per MWh, the Renewables Obligation works out at about £32.73/MWh, or 3.27p/kWh, before the buy-out fund is recycled back to suppliers.
The government's main support scheme for low-carbon generation. A generator agrees a fixed 'strike price' for its output. When the wholesale market price sits below that strike price, the generator is topped up to it; when the market price sits above it, the generator pays the difference back. Electricity suppliers fund the scheme through a compulsory levy paid to the Low Carbon Contracts Company, charged at a fixed £/MWh rate on a daily basis across each levy quarter and set three months in advance. Suppliers recover it through the rates they charge, including on business contracts.
Example:
Your unit rate includes a CfD levy element. You will not see it itemised, because suppliers are not required to break out policy costs on a business bill.
A closed scheme that pays owners of small-scale renewable installations - typically rooftop solar, small wind and micro-hydro - for the electricity they generate and export. It closed to new applicants on 1 April 2019, but existing installations continue to receive payments for between 10 and 25 years depending on technology and accreditation date. Ofgem spreads the cost across all licensed electricity suppliers in Great Britain by market share through a process called levelisation, and suppliers recover it through customer rates.
Example:
A neighbour's 2015 rooftop solar array is still receiving Feed-in Tariff payments, and a fraction of every business unit rate helps fund them.
A funding model that lets a new nuclear project recover money from electricity consumers while it is still being built, rather than only once it starts generating. It is being used to fund Sizewell C under the Nuclear Regulated Asset Base Model (Revenue Collection) Regulations 2023. The Low Carbon Contracts Company sets an Interim Levy Rate each quarter - the provisional per-MWh charge suppliers pay ahead of final reconciliation - and suppliers pass it through to customers.
Example:
The Interim Levy Rate for 1 October to 31 December 2026 is £3.754/MWh, which is 0.375p/kWh on a business electricity contract.
The maximum amount of electricity (measured in kVA or kW) that your premises is authorised to draw from the network at any moment. Set by agreement with your Distribution Network Operator (DNO). Capacity charges (also called availability charges) are the daily fee you pay based on your agreed MIC - you pay for reserved capacity whether you use it or not. Higher MIC means higher capacity charges. Businesses that have downsized but kept their original MIC may be overpaying.
Example:
Reducing your MIC from 100 kVA to 50 kVA after downsizing could save £1,000-£3,000 per year in capacity charges.
A fixed charge based on your agreed Maximum Import Capacity (MIC), reflecting the network capacity reserved for your site. Set by your DNO and passed through by suppliers. Unlike unit rates and standing charges, brokers cannot add commission to availability charges - though suppliers may mark them up before passing to customers.
Example:
Your availability charge of £15/month reflects the 70 kVA capacity reserved for your warehouse on the local network.
A major Ofgem review launched in July 2025 examining how costs are shared across the energy system. The review looks at wholesale costs, network costs, policy costs, and supplier margins to determine whether the current allocation (roughly 60% to non-domestic, 40% to domestic) remains appropriate. Exploring alternatives including time-of-use pricing, regional pricing, and capacity-based charges.
Example:
Under CARR reforms, businesses with smart meter data proving off-peak usage may pay lower network charges than those billed on 'average' assumptions.
The process Ofgem uses when an energy supplier goes out of business. Ofgem chooses a replacement supplier through a competitive process and moves the failed supplier's customers across automatically. Your gas and electricity keep flowing - Ofgem's own guidance is that your business energy supply won't be disrupted. The catch for a business is what you land on and what you lose: the new supplier normally puts you on a deemed contract, which can be more expensive because that supplier is taking on more risk, and the Safety Net that protects household credit balances does not cover business credit balances. Businesses have to apply to the failed supplier's administrators for money they were owed. You can leave the deemed contract and switch away without exit fees.
Example:
Your supplier collapses in November. Ofgem appoints a replacement, your supply never stops, but you are moved onto a deemed contract at a higher rate and have to claim your credit balance from the administrators rather than getting it back automatically.
The rulebook for operating in the Great Britain retail energy market. It sets the standards market participants must follow for things like switching, metering data, address and meter records, and customer consent. It is owned and managed by RECCo, which describes itself as a not-for-profit organisation that owns and manages the Retail Energy Code, the rules for operating in the Great Britain retail energy market. Several things that affect business switching directly sit under the REC, including the metering code of practice (CoMCoP) and the TPI Code of Practice.
Example:
When you switch supplier, the industry processes that move your meter record from the old supplier to the new one are governed by the Retail Energy Code.
A point where the national high-voltage transmission network hands electricity over to a local distribution network. NESO describes GSPs as the points of connection between the Transmission System and a Distribution System. GSPs are grouped into regions for settlement purposes, and those regions are one of the reasons the same supplier quotes different prices in different parts of the country: the cost of getting power to your area is measured and settled at the Grid Supply Point that feeds it.
Example:
Two identical shops, one in Cornwall and one in Yorkshire, sit behind different Grid Supply Points. Their supplier prices each site off its own GSP region, so they are quoted different unit rates for the same usage.
The wholesale auction where most electricity is bought and sold for the following day. Nord Pool, one of the exchanges that runs it, describes it as a closed auction where customers can sell or buy energy for the next 24 hours, with orders matched to maximise social welfare while taking account of the network constraints supplied by transmission system operators. The prices it settles are the reference point everyone else works from, so when the news reports 'wholesale electricity prices', this is usually what it means. It matters to you because your supplier's buying decisions - and, as half-hourly settlement spreads, time-of-use tariffs - trace back to these prices.
Example:
Generators and suppliers submit bids for each period of tomorrow. The auction clears and sets a price for every period of the next day - and that is the price your supplier was buying against when it built your quote.
A long-term contract to buy electricity directly from a specific generator - a wind farm, solar site or hydro scheme - rather than from a supplier buying anonymously on the wholesale market. A PPA gives the generator a guaranteed buyer and the buyer a known price over several years, plus a traceable link to the energy being used. Historically these were only realistic for very large corporate buyers because of the volumes and contract lengths involved, though aggregated and sleeved arrangements are starting to bring smaller businesses into reach.
Example:
Instead of buying power at whatever the wholesale market charges on the day, a business signs a ten-year PPA with a wind farm at an agreed price per kWh, and knows exactly which site its electricity came from.
The upcoming requirement for all Third Party Intermediaries (brokers, consultants, switching platforms) to register with Ofgem before operating in the energy market. Once Ofgem is formally appointed as TPI regulator, existing TPIs will have a 12-18 month 'sunrise period' to register and demonstrate compliance with new conduct principles and rules.
Example:
Your current broker must register with Ofgem by 2027 or face being banned from operating. Ask them about their registration plans.
Being paid to use less electricity, or to use it at a different time, when Great Britain's grid needs it. NESO, the National Energy System Operator, buys this flexibility through services such as the Demand Flexibility Service and the Capacity Market. Small businesses usually take part through a supplier or aggregator that pools many sites to meet each market's minimum size.
Example:
A restaurant agrees with its aggregator to turn down its air conditioning for an hour on weekday evenings when NESO calls a Demand Flexibility Service event, and is paid for the electricity it saves.
A UK government scheme that pays power stations and businesses to be available to supply power or cut demand during system stress events. Prices are set at auction: the March 2026 auctions cleared at £27.10 per kW a year for 2029/30 and £5.00 per kW a year for 2026/27. Each DSR unit must be at least 1MW, so small sites join through an aggregator, and DSR is paid on de-rated capacity.
Example:
An aggregator includes your 50kW of flexible load in its unit. At the 79% DSR de-rating factor and £27.10/kW a year, that load earns about £1,070 a year for being available, shared between you and the aggregator under your contract.
A NESO service that pays businesses and households, through their supplier or aggregator, to change their electricity use when the grid needs it. It has run year-round since November 2024 and, since April 2026, pays for turning demand up as well as down. Providers bid a price: the average accepted bid in winter 2024/25 was £210/MWh, or 21p per kWh.
Example:
On a cold weekday evening NESO calls a DFS event. Your business cuts 20 kWh, your aggregator's bid is accepted at 21p/kWh, and the event earns £4.20, shared under your contract.
A company that pools the flexible load of many small sites into one unit big enough to meet a flexibility market's minimum size: 1MW for the Capacity Market and the Balancing Mechanism, 0.1MW for the Demand Flexibility Service. The aggregator bids, measures each site against its baseline and pays the site its share under their contract.
Example:
An aggregator combines your 30kW of flexible load with other businesses' to build a unit of at least 1MW that can bid into the Capacity Market.
Combining the flexible capacity of several smaller sites to meet the minimum unit size a flexibility market sets: 1MW for the Capacity Market and the Balancing Mechanism, and 0.1MW for the Demand Flexibility Service since April 2026. Since P415 went live in November 2024, independent aggregators can also sell that flexibility in the wholesale market.
Example:
Through aggregation, a group of 50 pubs each with 20kW of flexible load can participate in the Capacity Market as a combined 1MW asset.
The real-time market NESO uses to balance electricity supply and demand second by second. Independent aggregators, called Virtual Lead Parties, can offer businesses' flexibility in it from units of 1MW, and since P415 went live in November 2024 they can sell it in the wholesale market too - so your flexibility provider doesn't have to be your energy supplier.
Example:
Your aggregator bids your battery storage into the Balancing Mechanism, earning premium rates for exporting power during unexpected demand spikes.
A certificate proving that electricity was generated from renewable sources. One REGO is issued per MWh of renewable generation. Historically, suppliers absorbed REGOs for free when businesses exported solar or wind power, but platforms like Soldera.org now allow smaller generators to sell these certificates separately, creating an additional revenue stream.
Example:
Your rooftop solar generates 50 MWh annually. Instead of giving your supplier the REGOs for free, you sell them separately for an extra £150-£250 per year.
Technology that allows electric vehicles to export stored energy back to the electricity grid during peak demand periods. V2G-enabled EV chargers turn your vehicle fleet into a mobile battery asset that can earn revenue through Demand Side Response programmes. Requires bidirectional charging equipment and compatible vehicles.
Example:
Your delivery company's 10 EVs sit idle from 4pm-7pm. With V2G chargers, they export power during the evening peak and earn £200/month in flexibility payments.
The practice of earning from multiple flexibility programmes simultaneously. 2025 rules allow businesses to participate in the Capacity Market, Demand Flexibility Service, wholesale arbitrage, and REGO trading at the same time, maximising the value of their flexible assets. Requires careful declaration to avoid double-counting penalties.
Example:
Your battery storage earns from three sources: £1,200/year Capacity Market retainer, £3,000/year from DFS events, and £800/year from arbitrage - totalling £5,000 from a single asset.
A British Standard ensuring 'Smart Appliances' like EV chargers, HVAC systems, and battery storage are interoperable and can communicate with any aggregator or flexibility provider. DESNZ has consulted on making this mandatory. Equipment that isn't PAS1878 compliant may trap you in a 'walled garden' unable to switch aggregators or access the best flexibility rates.
Example:
Before buying an EV charger, you ask: 'Is this PAS1878 compliant?' The supplier confirms it is, meaning you can switch aggregators freely in future.
A Balancing and Settlement Code (BSC) modification approved by Ofgem in August 2025 that removes the requirement for customers to be half-hourly settled before aggregators can trade their flexibility. This makes flexibility markets 'inclusive, accessible and impactful' for smaller businesses even before MHHS is fully rolled out. Described by Ofgem as 'a crucial piece of the puzzle' for consumer participation in the green revolution.
Example:
Thanks to P483, your small business can now participate in flexibility markets through an aggregator without waiting for MHHS migration or installing expensive half-hourly metering.
A regulatory licence required from late 2027 for any organisation that remotely controls energy consumption or production from smart devices like EV chargers, heat pumps, and batteries. Introduced under the Smart Secure Electricity Systems (SSES) programme, the licence ensures providers meet strict cyber security standards and consumer protection requirements before they can manage your business's energy assets.
Example:
Before signing a flexibility contract, you ask your aggregator: 'Do you hold a Load Control Licence?' From 2027, unlicensed operators will be illegal.
A company that enters into contracts with consumers to provide load control services on their Energy Smart Appliances. Under the Load Control Licence regime, FSPs serving small business consumers (under 200,000 kWh annual usage or fewer than 50 employees) must follow strict conduct standards including fair treatment, proportionate exit fees, and Energy Ombudsman access.
Example:
Your FSP manages your EV charger flexibility, earning you revenue when they reduce charging during peak times. Under the new rules, they must be licensed and cannot lock you into unfair exit fees.
An organisation that creates, changes, or controls the timing of sending load control signals to energy smart appliances. Under the Load Control Licence regime, load controllers must meet Cyber Assessment Framework (CAF) standards - Tier 2 for those managing under 300MW, or Tier 1 for larger operators managing 300MW or more.
Example:
The load controller sends a signal to your smart EV charger telling it to pause charging during the evening peak. They must be CAF-compliant to prove their systems are secure against cyber attacks.
A security framework that licensed load controllers must comply with under the Smart Secure Electricity Systems programme. Tier 2 applies to providers managing below 300MW (most SME-focused aggregators), while Tier 1 applies to larger operators managing 300MW or more, who are designated as Operators of Essential Services under Network and Information Systems Regulations.
Example:
Your flexibility provider confirms they are CAF Tier 2 compliant, meaning they have proven cyber security defences to Ofgem before they can remotely control your energy assets.
An independent dispute resolution service for energy consumers. Under the Load Control Licence regime, small business consumers (under 200,000 kWh or fewer than 50 employees) gain the right to escalate disputes with their Flexibility Service Provider to the Energy Ombudsman - a protection previously reserved mainly for domestic energy supply issues.
Example:
Your FSP wrongly charged you an excessive exit fee. After failing to resolve it directly, you escalate to the Energy Ombudsman for an independent ruling.
A formal dispute resolution process that sits outside the courts. In UK energy, ADR typically means an independent body (such as the Energy Ombudsman) can review a complaint if it cannot be resolved directly with the company. Proposed broker regulation is expected to strengthen ADR-style escalation and complaint handling for SMEs.
Example:
You complain to a broker, receive a final response, and then escalate to an ADR provider for an independent decision if you still disagree.
An intermediary who helps businesses compare and switch energy suppliers in exchange for commission. Since 1 October 2024, Ofgem's rules require suppliers to show any broker fee in your contract's principal terms. Quality and transparency vary significantly between brokers.
Example:
Your broker found you a quote at 24p/kWh, and your contract shows they're taking 3p/kWh commission, meaning the actual supplier rate is 21p/kWh.
The payment a broker receives for arranging your energy contract. Since 1 October 2024, Ofgem's rules require suppliers to show any broker fee in your contract's principal terms, in pence per kWh (micro businesses also see a total). Ofgem's data shows broker fees of about 3p/kWh were typical at some suppliers in 2022-23 - three times Meet George's 1p/kWh fee.
Example:
Your energy contract states: 'Third-party intermediary commission: 2.5p/kWh over the contract term'.
An amount a broker or third-party intermediary adds on top of the supplier's own rate, so the price you are quoted is higher than the price the supplier is actually charging. Uplift is usually added to the unit rate in pence per kWh, but it can also be loaded into the standing charge. It is how most broker payment is collected: you never receive a separate invoice, because the extra is baked into what you pay per unit and the supplier passes it back to the broker. Ofgem's supply licence conditions require these third party costs to be set out in the contract's principal terms, and for microbusinesses they must be shown as money as well as a cost per unit of energy or per day. Meet George charges a flat 1p/kWh fee that is itemised, never buried.
Example:
The supplier's rate is 21p/kWh. Your broker quotes you 24p/kWh. The 3p/kWh difference is uplift, and on 30,000 kWh a year that is £900 going to the broker.
The regulatory term for any company that acts between you and your energy supplier, including brokers, consultants, and switching platforms. Ofgem introduced TPI transparency regulations in 2024 requiring commission disclosure in all business energy contracts.
Example:
As a TPI, Meet George must follow Ofgem's transparency rules and ensure our 1p/kWh fee is clearly shown in your supplier contract.
Industry standards and regulations governing how Third-Party Intermediaries must behave when helping businesses switch energy suppliers. Key requirements include clear commission disclosure (mandatory from 2024), fair treatment of customers, and professional conduct standards enforced by Ofgem.
Example:
Under the TPI Code of Practice, your broker must show their commission amount in your energy contract before you sign.
A now-regulated practice where broker commission was invisibly built into energy rates rather than shown separately. From 2024, Ofgem requires all commission to be disclosed in the supply contract, ending this opaque practice. However, the commission is still typically added to the supplier's wholesale cost rather than charged separately.
Example:
Before 2024: Your quote showed 25p/kWh total with no commission breakdown. After 2024: Your contract must state the supplier rate and broker commission separately (e.g., 22p/kWh supplier rate + 3p/kWh broker commission).
Meet George speaks plain English. Upload your bill and George lists your charges line by line, works out what you pay per kWh all-in, and tells you whether you're in your switching window.
