Targeted charging review (TCR)
Transmission network use of systems (tnuos)
Transmission Network Use of System, or TNUoS, charges are calculated for each MPAN for the full year and billed equally every month.
What a tnuos charge covers
TNUoS charges cover the cost of using the National Transmission System, owned and operated by National Grid, to deliver electricity from power stations to your business. TNUoS charges only apply to half hourly (HH) MPANs.
A Triad is one of the three highest peaks of electricity demand identified by the National Grid that fall between November and February each year:
- They occur in a half hour period between 4pm and 6pm on winter evenings, when industry demand and residential demand coincides
- There must be at least ten days between individual Triads
- They tend to occur during the three coldest periods of winter.
Triads are used to calculate the Transmission Network Use of System (TNUoS) charges a business with half-hourly metering will incur. Further to Ofgem’s Targeted Charging Review (TCR), changes to the way Transmission Network Use of System (TNUoS) charges are calculated mean that Triads will still exist but will impact costs to a lesser extent compared with previous years.
What are usage charges?
Your energy usage is measured in kilowatt hours (kWh). The unit rate is the amount you're charged in kWh for the gas and electricity you use. One kilowatt hour is roughly the amount of energy it would take to keep a laptop powered for two days.
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%). If your premises qualifies for reduced rate VAT, you must complete a VAT declaration form and submit this to us so that we can apply it to your account.
Under HMRC rules as of April 2012, reduced VAT applies to charities and businesses that qualify for domestic use, which are currently defined as:
- armed forces residential accommodation
- children's homes
- homes for the elderly and disabled
- 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
Mixed Use VAT applies when some of a business’ energy is purchased 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 or charitable activities at the same premises, and at least 60% of the activity is certified as "Non–Business" the whole invoice will qualify for Reduced Rate VAT.
The de minimus rule (see Climate Change Levy for more information) also applies to VAT charges. That is if the average consumption of all MPxNs falls below 33 kWh of electricity or 144 kWh of gas per day, then Reduced VAT (5%) may be applied. This logic is applied on a bill–by–bill basis and as such, it’s possible that a customer over time may observe reduced rate on some invoices and standard rate on others, depending on their consumption.
Xoserve is a private company delivering transportation transactional services on behalf of all major gas transportation companies.