Energy and non-energy costs on your pub's electricity bill

Energy costs move with international supply and demand. Nobody in Britain controls them.

Non-energy costs are different. They are set by regulators (Ofgem, or the system operator NESO and the network companies under rules Ofgem approves) or by government (DESNZ, the Department for Business and Trade and HMRC). Unlike the wholesale price, they are the result of decisions, and decisions can be changed.

Supplier costs, profit and any broker commission also sit in the price. They are commercial: Ofgem does “not price regulate the non-domestic supply market”.^[26] Non-energy costs are a smaller share of gas bills, mainly because most levies fall on electricity only.^[27]

Rates below are for 2026/27 and exclude VAT. A standard or non-half-hourly meter is one that is not read every half hour, as at most single pubs. “Red” or “peak” means the weekday early evening, roughly 4pm to 7pm, when the networks are busiest.

Transmission Network Use of System charges pay for the high-voltage grid: the pylons and cables that carry power from large power stations and offshore wind to the regional networks. Ofgem sets how much the grid owners can collect; NESO turns that into tariffs.^[1][4] It has two parts.

1. The locational charge. On a standard meter you pay it per kWh on electricity used between 4pm and 7pm, every day of the year. It depends on where the pub is: zero across Scotland, the north of England, North Wales and the East Midlands, rising to about 2.07p/kWh in the South West (2.071095p). Half-hourly sites pay instead on their use at three winter peaks.^[1]

2. The residual, a fixed daily charge. This is most of the cost. Since 2023 it has been a fixed amount per site per day, banded by annual use on standard meters, so using less does not reduce it.^[1][6] A pub using over 27,543 kWh a year, which covers almost every pub, pays £3.461015 a day, or £1,263 a year, up 67.3% from £755 in 2025/26.^[1][2] A pub using 30,000 kWh pays the same as one using ten times as much on the same type of meter.

Half-hourly sites are banded by agreed capacity instead: up to 90 kVA pays £5.797 a day (£2,116 a year), up 48%.^[1]

What's changing. The rise came from Ofgem's new price control for the transmission grid, which started on 1 April 2026. Ofgem smoothed the increase, “with later rises to recover the deferred costs”.^[4] NESO's initial forecast is a further 26.5% for the pub band in April 2027, to about £4.38 a day.^[3]

Further ahead, Ofgem's own modelling puts the rise in network charges for a standard-meter site in the top band, which covers most pubs, at about £1,120 a year by 2030/31, compared with no new price controls. Ofgem says this is offset by lower wholesale and balancing costs, about £730 and £480 a year in its modelling. The network charge is a fixed line on the bill; the savings are a modelled estimate that would arrive, if at all, through the energy price.^[5]

Distribution Use of System charges pay for the regional cables, substations and poles that bring power from the national grid to your door. They are set by the 14 regional network operators under Ofgem's RIIO-ED2 price control, which runs to March 2028.^[9]

A standard meter pays two things:

• A fixed daily charge, banded by annual use in the same way as the transmission residual.
• Unit rates by time of day: red (busiest, most expensive), amber and green.

Both vary a lot by region. For the top band in 2026/27, the South West fixed charge is 29.69p a day with a red rate of 24.204p/kWh (5pm to 7pm on weekdays). The West Midlands fixed charge is 80.45p a day with a red rate of 10.325p/kWh (4pm to 7pm on weekdays).^[7]

Half-hourly sites on a site-specific tariff also pay a daily capacity charge on their agreed capacity (kVA), whether or not they use it, plus charges for exceeding it and for reactive power. In the South West that capacity charge is 12.18p per kVA per day.^[7]

Losses. Some electricity is lost as it travels through the networks. Suppliers pay levies on metered use scaled up for these losses, so the cost at your meter is somewhat higher than the published rates. The figures on this page do not include losses.

What's changing. April 2026 was mixed, not a general jump: the South West fixed charge fell 23% and the West Midlands rose 53%. Charges for April 2027 are already published, and the fixed charge rises 184% in the South West and 35% in the West Midlands.^[7]

Gas. Gas carries national and regional pipeline charges, a small Green Gas Levy and CCL, but none of the electricity levies above. For a pub using 100,000 kWh of gas a year in Cadent's North West area, these come to about 1.96p/kWh, or £1,958 a year (NEC calculation, assuming a 35% load factor).^[24][25][19]

This is an illustration built from the official rates above, not a real bill. It assumes one standard meter, 55,000 kWh a year and even use through the day. It excludes the energy itself, network losses, metering agents, supplier costs and margin, broker commission and VAT.

Levies that change each quarter use the 2026/27 average, so they differ slightly from the current-quarter rates above. In the South West, government levies are about 46% of the total, network charges 48% and CCL 6%. A pub that uses a quarter of its electricity between 4pm and 7pm pays more: £7,846 to £9,245 a year (14.26p to 16.81p/kWh), because the evening network and Capacity Market charges are the most expensive.

The same South West pub, at the rates in force on each date:

A snapshot of rates in force, not a year's bill. It leaves out the Feed-in Tariff, EII support levy and smart metering, which have no comparable prior-year rates. In the West Midlands, distribution rose rather than fell.

Because the transmission and distribution standing charges are fixed per site, they are spread over fewer units in a smaller pub. In the South West example, non-energy costs are 14.29p/kWh at 40,000 kWh a year against 12.22p/kWh at 100,000 kWh. A pub that cuts its use saves on the per-unit charges, but the fixed charges stay the same.^[1][8]

The investment is real. National Grid spent a record £11.6bn in the year to March 2026 across its UK and US businesses.^[28] The National Audit Office says spending on the transmission network is quadrupling, from £2.5bn in 2025-26 to over £11bn a year.^[32]

Returns have also repeatedly beaten what the regulator intended. Ofgem wrote in December 2025 that “in aggregate, network companies have typically outperformed under previous price controls”.^[33] In the current period, Ofgem's data shows electricity transmission owners on track for a 9.16% return on equity against an allowance of 4.70%, mostly from how the rules treated debt during the inflation spike.^[34] Citizens Advice puts that windfall at £5bn from 2021/22 to 2024/25.^[35] For 2026–31, Ofgem has raised the allowed return on equity for electricity transmission from 4.55% to 5.70%, citing higher interest rates.^[33]

To be fair to the industry: most network companies invest more than they earn from operations and borrow the difference, not every company outperforms, and the new controls block dividends if borrowing reaches 75% of a company's regulated value.^{[28][29][30][31][34][33]} The point is not that the investment is unnecessary. It is that returns have come out above what the regulator intended, allowed returns are rising again, and the cost lands on bill payers, pubs included.

The November 2025 Budget took “around £150” off average household bills from April 2026, mainly by ending the Energy Company Obligation and having the taxpayer pay 75% of the household share of the Renewables Obligation.^[36] The discount is for domestic customers only.^[37] A 55,000 kWh pub still pays about £1,800 a year towards the Renewables Obligation; the same 75% cut would save it about £1,350 (NEC calculation).

Energy-intensive businesses have been fully exempt from Renewables Obligation, Feed-in Tariff and CfD costs since 2024/25. The government's own impact assessment calls this “a transfer of policy and network electricity costs from eligible consumers to ineligible consumers”.^[38] Pubs and brewers are not eligible.^[39] The same businesses now get back 90% of their network charges, funded by the EII support levy on everyone else. In the government's own example of a pub using 48,000 kWh a year, these schemes cost the pub £53–£72 a year, plus £19 for this year's uplift.^[40]

A separate scheme for manufacturers, the British Industrial Competitiveness Scheme, starts in April 2027. No hospitality or brewing code is on its eligible list, and the government says it will be funded so that other customers' bills do not rise.^[41][42]

Ofgem says fixed business contracts fix “the price of unit rates and standing charges for the length of the contract”.^[43] Yet many suppliers' terms let them pass on network and government charge changes during the term. April 2026 tested this. SmartestEnergy, Yorkshire Gas & Power and Yü Energy say on their own websites that they passed the transmission increase into existing fixed contracts.^[44][45][46] tem absorbed it for contracts agreed before October 2025, and EDF said in February it was not passing it on to small businesses “at this time”.^[47][48]

Ofgem foresaw suppliers “triggering re-opener clauses” back in 2020.^[49] Its rules require suppliers to make clear that prices can change, but do not limit how much.^[50]

You cannot negotiate the rates themselves, but you can make sure you are charged correctly and that your contract says what you think it says.