Non-Commodity charges (Electricity)

What is CCL?

Climate Change Levy (CCL) is a UK specific energy tax that is applied to business customers who consume on average more than 33 kWh per day. CCL is not applied if the average consumption falls below this value which is called 'de minimus'.

For clarity where a customer owns a single site with multiple MPANs, the total "de minimus" consumption is derived from aggregating the consumption for all MPANs on the site. This total is compared against the "de minimus" to determine whether a CCL levy should be applied.

A reduction in the CCL rate may be applied if you have the relevant CCL certificate issued by HMRC -

What are Distribution Use of Systems (DUoS) charges?

Distribution Use of System (DUoS) charge – A charge included in a customer's electricity bill to cover the cost of supplying their electricity through their DNO's regional network.

Distribution Use of System Charges cover the cost of receiving electricity from the national transmission system and feeding it directly into homes and businesses through the regional distribution networks. The DUoS charge covers the costs of installing, operating and maintaining the regional distribution network, to ensure a safe and reliable electricity supply.

Transmission Use of Systems (TNUoS) charges

Transmission Network Use of System Charge (TNUoS) which covers the cost of using the National Transmission System, owned and operated by National Grid, to deliver electricity from power stations into and across the transmission network.

The "Transmission Use of System" (TUoS) charges are levied by the national grid and only apply to half hourly (HH) MPANs.

TUoS charges are calculated for each MPAN for the full year and billed equally every month.

Balancing Services Use of System (BSUoS)

The BSUoS charge recovers the cost of day to day operation of the transmission system. Generators and suppliers are liable for these charges, which are calculated daily as a flat tariff across all users.

Feed-in-Tariff? (FiT)

The Feed-in-Tariff scheme (FiT) is a subsidy scheme introduced in 2010 to support small scale, renewable generation in the UK. The scheme is limited to projects under 5MW and works by providing a fixed price for up to X years set by the government to generators for each unit of electricity they generate.

The scheme is organised into FiT years, with payments being made to generators quarterly. Suppliers declare their volume and payments made to generators quarterly, which is then reconciled so all suppliers pay the same equivalent £/MWh cost (called levelisation).

Renewables Obligation (RO)

The RO is currently the main financial mechanism by which the Government incentivises the deployment of large-scale renewable electricity generation. The RO places a mandatory requirement on licensed UK electricity suppliers to source a specified and annually increasing proportion of electricity they supply to customers from eligible renewable sources or pay a penalty. The scheme is administered by Ofgem who issue Renewables Obligation Certificates (ROCs) to renewable electricity generators for every megawatt hour (MWh) of eligible renewable electricity they generate. Generators sell their ROCs to suppliers or traders which allows them to receive a premium in addition to the wholesale electricity price.

Understanding your bill

MPAN Supply Number

A unique identifier for your supply, referred to as MPAN, supply number and S Number. 

Account Number

Your unique customer identifier, please quote this in all correspondence with Hudson Energy.

Usage Charges

Details of the kWh consumption across the meter periods and meter registers. Also shows the total

Standing Change

A fixed cost paid in addition to usage charges for gas and electricity. Standing charges cover costs like meter reading, maintenance, connection to the energy network and, in the case of gas, emergency services.

Meter Service Charges

The Metering Services Charge covers the cost of your meter/s and operating, maintaining and reading meter/s at your business.

What is VAT and at What Level am I Charged?

VAT is charged at either the Standard rate (20%) or at the Reduced rate (5%). Under HMRC rules as of April 2012, reduced VAT applies to charities and businesses that qualify for domestic use, which are currently defined as follows:

  • armed forces residential accommodation
  • caravans
  • children's homes
  • homes for the elderly and disabled
  • hospices
  • houseboats
  • houses, flats or other dwellings
  • monasteries, nunneries and similar religious communities
  • school and university residential accommodation for students and pupils, or
  • self–catering holiday accommodation

There is also the concept of Mixed Use VAT, where a business purchases energy some of which is for domestic or charitable purposes. In this instance, the organisation may be entitled to obtain a VAT Certificate from HMRC ( that entitles them to have a proportion (1–100%) of their energy bills qualify for Reduced VAT.

Where a qualifying business carries out Business and domestic/charitable activities at the same premises, and at least 60 per cent of the activity is certified as "Non–Business" the whole invoice will qualify for Reduced Rate VAT.

The 'de minimus' rule can also apply to VAT charges - that is if the average consumption of all the MPANS falls below 33 kWh per day, then Reduced VAT (5%) may be applied. This logic is applied on a bill–by–bill basis and as such, it is possible that a customer over time may observe reduced rate on some bills and standard rate on others, depending on their consumption.

Non-commodity charges (Gas)

Annual Quantity (AQ)

The annual consumption at a site, measured in kWh. Calculated on historical usage and held by Xoserve or the IGT. Supply Point AQ is the total annual consumption of all meters on a site. Meter Point AQ is the AQ for a particular Meter Point.

Supply Point (SP)

A group of one or more meters for which National Grid shall make Natural Gas available for offtake by the Shipper. These can categorised as Domestic or Non-Domestic.

A Daily Meter is a Supply Point whose annual quantity (consumption) is greater than 58,600,000kWh (2,000,000 therms per annum), will have a mandatory DM meter fitted. Hudson Energy does not supply DM sites. A daily meter is recorded every day whereas a Non-Daily Metered Supply point has its consumption read on a monthly, quarterly or longer basis.

Gas Transporter (GT)

Responsible for maintaining a gas supply network. They may also be requested by the Supplier via the Shipper to provide a meter for the consumer’s usage. Requires a GT licence.

Domestic / Non Domestic Supply

A Supply Point with an AQ of 73,200kWh (2500 th) or less, is deemed as a domestic site. (This does not mean the user is necessarily residential). A supply point with an AQ of over 73,200kWh is deemed as non-domestic.

MPRN (Gas Meter Point Reference Number)

The MPRN is the unique identifying number for the gas meter at your property. The MPRN should be printed on your gas bill and consists of between 6 and 10 digits. If the MPRN starts with 74 to 77 and is 8 digits long then the gas is piped through an IGT.

Project Nexus

An industry wide gas initiative to replace the current gas settlement and administration systems in the UK, with the aim of improving the quality of consumption data available, aligning IGT and GT processes and allowing meter point level reconciliation for all meter points.
Currently scheduled for deployment in October 2016.

Supply Offtake Quantity (SOQ)

The maximum daily consumption for a supply point, measured in kWh.


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