If you’re responsible for a ‘large’ electric supply for your business you might have seen the acronyms DUOS and TUOS on your bills and wondered what they mean and – more importantly – why you are paying for them. Conversely, if you pay for a smaller supply, you might think these charges don’t affect you.
In fact Use of System (UOS) charges make up almost one-fifth of all electric bills, whether for a small apartment or a vast industrial complex.
What is TUOS?
Transmission Use of System (TUOS) charges account for 7% of electric bills and cover the cost of using the National Electricity Transmission System (NETS) operated by National Grid, Scottish Hydro Electricity Transmission and Scottish Power Transmission. This network delivers electricity from power stations to the regional transmission networks. It is, essentially, the motorway of the electric network.
What is DUOS?
Distributed Use of System (DUOS) charges make up approximately 12% of all electric bills. They are paid to your local DNO (Distributed Network Operator – effectively a privatised, but heavily regulated, monopoly) who operate the regional transmission network between the NETS and your home or business. The infrastructure that they operate and link includes overhead and underground cables, substations and local distribution generators.
In short, UOS charges are unavoidable because they are essential to pay to move electricity from the place of generation to wherever it is needed. They are integrated into kWh rates, standing, capacity and reactive charges.
However, there are ways in which you reduce your costs.
- Use less energy – the obvious answer but surprisingly overlooked by many businesses.
- Generate your own energy and minimise UOS charges. Cash-flow positive funding is available and return on investment can be extremely quick if planned and implemented intelligently.
- Stay within your agreed available capacity or, if you find you regularly exceed it, find out why and what can be done about it. If high demand is unavoidable, arrange an increase.
- Use your energy at more unsociable hours (ie generally between midnight and 7am) when UOS rates (and subsequently kWh rates) are lower.
Which of these potential solutions have you attempted?