We’re Absorbing £7M+ in Costs to Protect Our Customers.

Why It Matters

Unexpected TNUoS hikes can erode business margins and destabilize cash flow, exposing a systemic transparency gap in UK energy contracts.

Key Takeaways

• TNUoS charge up 60% for 2026
• tem absorbs £7M+ (≈$9M) for legacy contracts
• Most suppliers will pass the increase to customers
• NCCs lack standardized disclosure across the industry
• Reform needed to protect businesses from surprise fees

Pulse Analysis

The Transmission Network Use of System (TNUoS) residual banded charge is a standing fee that funds the UK’s high‑voltage grid. NESO’s 2026 determination lifts the charge by roughly 60 percent, reflecting years of deferred investment and the accelerated rollout of renewable generation. Because TNUoS is classified as a non‑commodity cost, it sits outside the energy price itself and is applied uniformly to all business accounts. The sudden jump translates into millions of pounds of additional expense for companies that locked in rates assuming a stable standing charge.

Tem, a supplier that operates outside the traditional wholesale market, announced it will absorb more than £7 million (about $9 million) of the increased TNUoS cost for contracts signed before October 2025. By internalising the shock, tem protects cash‑flow and preserves margin for pubs, manufacturers and other SMEs that would otherwise face unexpected invoice spikes. The move also showcases a business model that can hedge regulatory spikes, giving tem a differentiating selling point in a market where most rivals intend to pass the charge through to customers.

The episode underscores a systemic weakness: non‑commodity charges such as TNUoS, the Climate Change Levy and the Nuclear RAB levy are disclosed inconsistently and lack a mandatory framework for pass‑through rules. Without clearer regulation, businesses remain vulnerable to surprise fees each April. Stakeholders are calling for standardized reporting, transparent calculation methods and contractual safeguards that prevent unilateral cost shifts. Companies should audit their standing‑charge clauses now and negotiate explicit pass‑through limits before the next renewal cycle.