Terms of Acceptance
Please be fully aware of the below before accepting any offer of supply:
1. Acceptance of the contract is subject to you (the customer) accepting your chosen suppliers Terms & Conditions. Your credit status at the time of agreeing a contract. Your acceptance of the chosen payment method in line with the offer and final confirmation of acceptance by the chosen supplier. Your supplier reserves the right to uplift your charges if you deviate from the stated payment method on your contract.
2. Offers are limited and may be withdrawn at any time due to market movement.
3. If you have outstanding debt on your account or you have not provided the correct notice of termination to your current supplier, you will not be able to move supplier.
4. Certain suppliers will request a formal contract in addition to any acceptance documentation.
5. It is your responsibility to ensure that the correct CCL exemption documents are completed and lodged with your chosen supplier to ensure you receive your exemption.
6. All offers and contracts are based in line with the most up to date information that CUB® has access to. If you notice any anomalies with your contract paperwork please let us know as soon as possible as we cannot be held liable for any inaccurate information. Offers are subject to change if any information is inaccurate or omitted.
Third Party Energy Charges
These are charges that the Energy Suppliers pass on to consumers for the cost of providing electricity or gas to a business premises. These charges now form over 50 percent of a business’s total Energy Cost in addition to the charges for Wholesale Energy. A Third Party Energy Charge is one that is levied normally by the Government or a Distribution Network Operator (DNO). These costs will be charged to customers through their bills. These charges are typically reviewed in April and October.
We expect these costs will continue to rise in order for future investment to be made in the industry.
Listed below are the various Third Party Charges that you should expect as part of your Energy Contract. We believe that it is important for our customers to understand how these costs make up part of their bill, what they mean, how they work and how they may affect future budgeting. We will work closely with you in order to secure the most effective Energy Contract and solution for your business.
RO (Renewables Obligation)
This scheme places obligation on UK Energy suppliers to source an increasing amount of their energy from renewable sources.
The cost of this is passed on to customers through their energy contracts and is confirmed by the government prior to the start of the financial tax year and commences for one year i.e. 1st April 2015—31st March 2016. Suppliers generally have to calculate the cost of this outside of this period and can often reconcile charges if they have not included enough ‘risk’ at the start of the contract. This is very much dependent on the type of Energy Contract you have agreed to. The plan going forward is that RO will be phased out in 2017 and CFD (“Contracts for Difference” will replace this cost)
FIT (Feed in Tariff)
This is a government imposed levy collected from all energy consumers by their suppliers. It was introduced in April 2010 as an incentive paid to businesses and property owners who generate onsite renewable energy. Most small-scale renewable generation technologies qualify for the scheme, including solar photovoltaic (PV) panels, wind turbines, hydroelectricity, anaerobic digesters and micro combined heat and power (CHP) The UK is generating more renewable energy than ever before, especially from solar PV. This means more FIT qualifying electricity is being generated and more FIT payments are being made. As a result, the amount of money energy suppliers have to pay into the fund has increased and in turn so has the FIT charge to businesses that don't have any on site renewable generation .
CFD (Contracts for Difference)
This is a scheme introduced by the Government to encourage investment in low carbon technologies by providing greater certainty of future revenue for generators. CFD costs are met by a levy applied to the energy suppliers, which is then passed on to consumers. It is expected that CFD will take over fully from RO “Renewables Obligation” in 2017. This scheme was introduced by the Government as part of the EMR (Electricity Market Reform) programme.
CM (Capacity Market)
The CM (Capacity Market) charge was introduced as part of the Energy Market Reform (EMR) programme. It is designed to make sure we have sufficient power available to meet the country’s future demands. This is becoming more important as older plant and equipment closes to make way for increasing amounts of new low-carbon generation. The CM charge places obligation on Electricity generators to deliver energy when needed or face penalties. At the same time households and businesses up and down the country will benefit from greater security of supply.
EII (Energy Intensive Industries)
The EII (Energy Intensive Industries) charge is a cost implemented by the Government that has been imposed on non Energy Intensive users to assist with compensation/relief from the Third Party Charges of Small Scale FIT (Feed in Tariff) and RO (Renewables Obligation).
Energy Intensive users in certain industry sectors may be exempt from a significant proportion of these costs in order to ensure that they maintain their competitiveness internationally. They are currently entitled to cash compensation from the cost of these schemes (i.e. they pay the costs but receive compensation from the Government). From April 2017, it is proposed that this would change to a direct exemption at source; however, this is subject to State Aid Approval. If you feel that your business may fall under the EII Scheme your Account Manager will be able to assist.
DUOS (Distribution use of System)
DUOS (Distribution use of System) charges are levied by the UK’s regional DNOs (Distribution Network Operators). They go towards the operation, maintenance and development of the UK’s electricity distribution networks.
DUOS charges are made up of numerous elements including available capacity (KVA), standing charge and KWH units (typically split into red, amber and green). DUOS costs are passed on to customers from the Energy Supplier who then collects them on behalf of the relevant DNO. They may be visible on your bill, or built into your contracted rates dependent on the type of Energy Contract that you have agreed.
TNUOS (Transmission Network use of System)
The TNUOS (Transmission Network use of System) charge is there to recover the costs of running and maintaining the National Grid. This charge is split between the generators and suppliers of electricity across the UK. For businesses that have a half-hourly meter their TNUOS charge is based on their average demand during the three half-hour periods of national demand between November and February, known as the Triad. The three Triad periods almost always fall in the early evening, when there’s most demand for electricity, and must be separated by at least ten working days.
For Businesses with Non Half Hourly Metering their TNUOS charge will be based on their profiled electricity use between 4pm and 7pm, throughout the year. TNUOS charges may be visible on your bill, or built into your contracted rates dependent on the type of Energy Contract that you have agreed.
BSUOS (Balancing Services use of System)
The BSUOS charge is the mechanism by which National Grid recover the cost of balancing the transmission network. I.e. ensures generation and demand are matched. The BSUOS charge is administered by the National Grid and it charges Energy suppliers and generators daily, proportionally to their system usage volumes.
The National Grid incurs a cost for the day to day operation of the transmission system; this cost is recovered via the BSUOS charge. Generators and suppliers are liable for these charges, which are calculated daily as a flat tariff and then passed on to consumers accordingly.
CCL (Climate Change Levy)
The Climate Change Levy charge (CCL) is an environmental tax that was introduced in the UK in April 2001. It's charged on the business use of energy. The CCL cost is a key part of the UK governments’ strategy to promote energy efficiency and reduce greenhouse gas emissions. The CCL is applied to electricity, gas, coal and Liquid Petroleum Gas (LPG), but is not applied to any domestic supplies. The CCL charge is reviewed annually year on year around April and is ever increasing. It is possible to obtain an exemption from the CCL scheme however specific criteria and industry sectors apply. If you believe that you are or should be exempt from the cost of CCL please insure you discuss this with your Account Manager so that the correct documentation can be supplied to you. As this is a government Levy we do not include this cost in our prices however this can be requested through your Account Manager should you wish.
Energy Contracts Explained:
A Pass-through Contract
Pass-through contracts come in several different forms so it is important that you discuss the options with your Account Manager before making a decision. A typical Pass-through Contract fixes the wholesale costs of energy however all Third Party Charges i.e. Distribution charges, RO, FIT, CFD etc as mentioned above will be charged at the point of billing, typically at the same cost that the suppliers are charged. A pass-through contract can often look more attractive than a ‘Fully Inclusive’ offer as in most situations the Third Party Charges are not included in the unit costs of Energy.
The nature of a Pass-through Contract is that The Third Party Charges will change throughout your contract in line with the prevailing industry cost alleviating the Energy Suppliers risk premiums. Whilst it is difficult to accurately budget future costs with a Pass-through Contract they are sometimes seen as a more transparent option as many of the Third Party Charges mentioned above are broken down in your bill. Also if the cost of energy is not an important part of your business then this could present a good option for you.
A Standard Contract
In a Standard Contract typically all Third Party Charges are included but not “fixed”, meaning that the Energy Supplier has included a risk premium or threshold for the uncertainty on how these costs may turn out in the future. If it should turn out that the supplier under forecasted for these costs throughout the contract they may choose to uplift the unit cost of energy and/or standing charge to compensate for any losses. This can either be done through reconciliation at a later stage or an instant uplift throughout the contract. This very much depends on your Energy Suppliers Terms and conditions so we recommend that you read and discuss these with your Account Manager before making a decision. It is worth noting that some standard contracts exclude certain charges whilst others may include them.
A Fixed Contract
In a Fixed Contract Typically most costs are “fixed” for the length of the contract and it is unusual that reconciliations or uplifts take place. However this is not impossible and even with this type of contract however rare suppliers can reserve the right to increase costs throughout the contract term in certain situations so we recommend that you read & discuss their Terms and Conditions with your Account Manager before making a decision. You could expect that any Brand New Industry Charges introduced by the Government would most likely be passed on to you. Some suppliers may choose to absorb these for the remainder of the contract term. Your Account Manager will be able to advise you on this as changes take place. It is worth noting that some fixed contracts exclude certain charges whilst others may include them.
A Flexible Purchasing Contract
These types of Energy Contracts allow businesses to spread their purchasing decisions throughout the life of the contract as opposed to fixing the energy in one hit. Energy is traded on the wholesale market in portions often referred to as “clips” or “tranches” allowing customers to build up their price. This type of product does not carry heavy supplier premiums and can often work as a cheaper alternative to a Fixed Contract. These products carry entry levels so it is worth a discussion with your Account Manager to see if you may be eligible.
In addition to this CUB UK Ltd currently have two bespoke Flexible basket options available to customers that include some key benefits providing uniqueness to Energy Purchasing.
PLEASE NOTE - any newly introduced legislations resulting in additional costs may be passed on to you throughout your contract term even on a “Fixed” Contract). These charges are calculated in accordance with the Suppliers Terms and Conditions of supply.
PLEASE NOTE - CUB UK Ltd do not include CCL (CLIMATE CHANGE LEVY) and VAT in our offers as these are taxes that are always charged at the amount determined by the Government at the time of billing.