DUoS and TNUoS
The Targeted Charging (TCR) Review was announced in 2017 by Ofgem as a review of how customers are charged to cover the cost of distribution and transmission network operators. Many energy-intensive industries had found ways to mitigate these costs under the previous system, known as TRIAD, where energy use could be off-set during so-called TRIAD periods. Instead, the replacement system, that will be fully implemented by April 2022, changes how end-users are charged to a range of voltage-based bands.
Distribution Use of Service charges (DUoS) and Transmission Network Use of Service charges (TNUoS) cover the costs of your distribution network operator and National Grid, respectively, in terms of maintaining and upgrading their infrastructure. Following the application of the TCR, TNUoS will be based on a series of fixed charging bands set for the whole country. However, for DUoS, what non-domestic customers pay will vary depending on charging bands calculated differently for each distribution area. For areas with high demand and/or a large amount of distributed generation, the greater demand on the distribution network will see higher banding to cover the costs of repair and upgrade.
Within a distribution area, your banding will be decided by your voltage level during the 24-month period ending in 2020. For larger consumers this will be calculated based on your agreed capacity, while for set consumers it will be based on net consumption value.
The TCR changes will broadly see a small discount for larger consumers that use half-hourly (HH) metering, while smaller businesses and domestic users will likely see a marginal increase. However, if you are currently using offsetting to minimise these costs under the TRIAD system, you could see a substantial increase in your overall costs.