Non-Commodity Costs

Your Energy invoices are made up of a combination of the costs, the industry term for these costs are categorised into commodity cost (the energy you consume) and non-commodity costs.

Your non-commodity costs are set and managed by the government and are generally industry charges. Some of these charges are levied on suppliers who then pass them onto customers.

Non-commodity charges make up around 50-60% of your invoice and are rising year on year. The world of non-commodity charges can be confusing, as understanding what party influences each commodity is important to begin to challenge or rectify the cost.

Non-commodity costs accounted for around 23% of a consumer’s bill in 2009 and are expected to rise to at least 64% by 2021.


To put this in perspective

A site with an annual consumption of 1,000,000 kWh will see an increase of around £21,000 between 2017 and 2020 even if the wholesale cost of energy does not change

The industry doesn’t provide much support in terms of reducing commodity costs, although the review is done regularly, we have only seen commercial commodity costs constantly rise.

Analysing and ensuring the charges are correct can save hundreds and sometimes thousands of pounds. 

It isn’t always possible to make the adjustments to commodity costs without first carrying out a full in depth review of Energy Usage and Annual Energy Forecast. The commodity costs are split as mentioned above, this makes it difficult for suppliers to estimate what each customer will do for the coming year. 

Our advice on this matter is to have a conversation and analyse what projected Energy usage will be so we can work together and make the required changes to suit your business. 


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