TNUoS charges, explained.

What TNUoS pays for

The transmission system is the high voltage network of pylons, cables and substations that carries power from where it is generated to the point where a regional distribution network takes it on. Transmission Network Use of System charges, in the words of the tariff report itself, recover the cost of installing and maintaining that system in England, Wales, Scotland and offshore.

For 2026/27 the total to be recovered is £7.61 billion. Generators pay £1.23 billion of it on their transmission entry capacity, and demand pays the rest: £6.38 billion, spread across every metered site in Great Britain. That is the number behind every transmission line on every business invoice in the country.

The instrument, and why the rates are knowable in advance

TNUoS is not a price. It is a published methodology with an obligation attached to it. Condition E10 of the Electricity System Operator licence and the Connection and Use of System Code require NESO to publish final tariffs for a charging year. NESO cites paragraph 14.29 for that obligation; the deadline itself is at paragraph 14.14.12, and the methodology that produced the tariffs is the statement of the use of system charging methodology in section 14 of the same code.

In practice that means one fixed point and a rhythm around it. The fixed point is the final tariffs, which paragraph 14.14.12 requires by the end of the preceding January, for effect from 1 April. The draft comes a month or two before that, and the month moves: December for 2026/27, but NESO has scheduled the 2027/28 draft for 30 November 2026. So a transmission charge on an invoice is checkable against a document that existed before the period began.

One caution about that. The same paragraph says NESO may update the tariffs part way through a financial year, and paragraph 14.17.7 sets out how to price it when that happens, by pro-rating the applicable tariffs across the months each one covers. NESO has not exercised the power in recent years, so two rates inside one charging year is unusual. It is not, on its own, a supplier error.

How it differs from the distribution charge beside it

Distribution charges pay for the local network, are set by the operator of the network area a site sits in, and are published in that operator schedule of charges. Transmission charges pay for the national network above it, are set once for the whole country by NESO, and vary by zone rather than by network area. The boundary between the two is the grid supply point, the substation where transmission hands electricity over to distribution.

Three charges under one name

A demand site can face three separate transmission elements, and a fourth exists as a credit rather than a charge. Which of them applies turns on one thing: whether the meter is settled half-hourly, which is the thing Market-wide Half Hourly Settlement is changing for every meter in the country.

The proportions are the part people get wrong. Of the £6.38 billion to be recovered from demand in 2026/27, £6.265 billion comes through the residual. The locational element, the one that triad avoidance exists to reduce, is what is left.

One detail worth holding on to: the non-half-hourly window, settlement periods 33 to 38, is the same six half hours the Capacity Market Supplier Charge uses, although that charge takes only the working days between November and February while this one takes every day of the year.

The formula, once

How it reaches your bill

NESO does not invoice sites. It invoices suppliers, against the balancing mechanism unit each supplier registers, and the code sets out exactly what that invoice contains: energy, demand locational, transmission demand residual and embedded export, summed.

For the residual the calculation is arithmetic on a site count. NESO multiplies the number of sites a supplier serves in each band, by the number of days it served them, by the rate per site per day for that band. Where one connection site is served by more than one supplier, the charge is divided between them annually in proportion to the consumption each took the previous year.

The locational element cannot be calculated at the time it is billed, because the triad has not happened yet, and when it has happened the metered volumes are not final. So suppliers are billed monthly against forecast volumes and reconciled afterwards, twice, the last of them once Elexon final settlement data is available up to sixteen months after the financial year concerned.

Two consequences reach your invoice. On a fully fixed contract none of this is visible, because the supplier has priced its own estimate of these charges into the unit rate and carries the risk of being wrong. On a pass-through contract all of it is visible, including reconciliations for periods you have already paid for, which is normal and can be large. Which of the two you are on is a term of the contract, and it is covered in the guide to the bill as a whole.

The fixed residual, and your band

Until 2023 the transmission residual, the part of the charge that recovers the fixed cost of the network that already exists, was recovered on triad demand. A site that cut its demand in those three half hours cut its share of the fixed costs with it, and the costs did not go away: they moved onto everyone else.

Ofgem published the Targeted Charging Review decision on 21 November 2019, updated 18 December 2019, and decided that residual charges would be levied as fixed charges on final demand only. Transmission moved onto banded fixed charges from April 2023. The behaviour it was designed to stop, avoiding a fixed cost by moving demand rather than reducing it, is exactly what a fixed daily charge cannot be avoided by.

How the bands are drawn

The code sets one charging band for domestic sites, four for each non-domestic residual charging group connected to a distribution network, four for sites connected directly to the transmission system, and one for unmetered supplies. The four are cut at the 40th, 70th and 85th percentiles of the population in that group, or at the 40th, 70th and 93rd for transmission-connected sites. Twenty two bands are published in total for 2026/27.

Which group a site belongs to follows the voltage of the connection. Within a group, the band follows agreed capacity where the site has one, and annual consumption where it does not. That second case is the whole-current low voltage site with no maximum import capacity on record, which is most small commercial premises.

The right hand column is the rate multiplied by the 365 days of the 2026/27 charging year, which is what the site actually pays if it is connected for all of it. Nothing in that column depends on consumption, on load shape, on the time of day, or on the region. A 1,500 kVA high voltage site in Inverness and a 1,500 kVA high voltage site in Plymouth pay the same £185.418505 a day.

Who assigns the band, and how long it lasts

For a site connected to a distribution network, the network operator assigns the band, under a methodology it is required to maintain in the Distribution Connection and Use of System Agreement. For a site connected directly to transmission, NESO assigns it, using the mean of the latest 24 months of consumption data where that exists and a defined fallback where it does not.

The assignment then holds for the duration of the transmission owner price control period, not for a year. That is the single most surprising thing about this charge for anyone used to reviewing capacity annually: reducing an agreed capacity does not move the band at the next 1 April. It moves at the next re-banding, or through the intervention process covered in the deep dives below.

Triads, and the locational charge

The locational element is the part of TNUoS that says where a site is. It reflects the cost of moving power to that part of the country, so it rises the further a site sits from where generation is concentrated, which in Great Britain means it rises heading south.

On a half-hourly metered supply it is charged on the triad. The code defines that as the settlement period of highest net system demand in the financial year, plus the two next highest, each separated from the peak and from each other by at least ten clear days, between November and February inclusive. Exports on large interconnectors are excluded from the demand figure.

Three properties follow from that definition and all three matter. The triad is national, not local, so it is the same three half hours for every site in the country. It is determined after the event, from settlement data, so nobody knows on the day whether a given evening was one. And it is confirmed at the end of March, after the charging year it applies to has finished.

Note the gaps. Forty six days between the first and the second, twenty nine between the second and the third: the ten clear day rule forces the three peaks apart, which is why they never land in the same cold snap. Note also that two of the three are not the obvious candidates. A site that shed load only on the coldest evenings of the winter would have missed the November one entirely.

The zonal tariffs for 2026/27

There are fourteen demand zones. A site belongs to the zone of the grid supply point group it sits in, which is determined by the distributor identifier at the front of its meter point number, not by anything the site or the supplier chooses.

Seven zones are at zero. That is not an absence of data: demand tariffs are floored at zero so they cannot become a payment, and the calculated value for the north of the country is below the floor. For a half-hourly site in Newcastle, Leeds or Glasgow, the entire locational element of TNUoS for 2026/27 is nil, and every pound of transmission on the invoice is residual.

At the other end, zone 14 is charged £14.130209 per kW of triad average demand. A site with 1 MW of demand across the three triad half hours pays £14,130.21 a year in South Western and nothing at all in Northern Scotland, for identical consumption.

A worked example

One site, one month, both elements, at the published 2026/27 rates. The rates are real. The site is not: its size and demand are stated assumptions, and they are the only assumed numbers here.

Assumed site

London, zone 12

Assumed connection

High voltage, 1,500 kVA agreed capacity

Residual band, from voltage and capacity

HV3

Assumed triad average demand

1,100 kW

Billed period

1 to 31 July 2026, 31 days

Residual: £185.418505 x 31 days

£5,747.97

Locational, annual: 1,100 kW x £6.453239

£7,098.56

Locational, this period: £7,098.5629 x 31 / 365

£602.89

TNUoS for the month

£6,350.86

Three details in that arithmetic are worth stating because they are where hand calculations go wrong. The residual is charged on days, so a 31 day invoice carries more of it than a 28 day one on identical consumption. The locational charge is annual by construction, so a sub-period takes its day-count share of the year rather than being computed from the days in it. And the total is the sum of two lines each already rounded to the penny, which is how an invoice is built: add the unrounded figures instead and you land a penny higher, at £6,350.87, without either of you being wrong.

The same site over a full year

Residual, 365 days at £185.418505

£67,677.75

Locational, 1,100 kW at £6.453239 per kW

£7,098.56

Total TNUoS, 2026/27

£74,776.31

Share of it that is residual

90.5%

Nine tenths of the transmission bill for this site cannot be moved by anything the site does with its load. It is a function of the meter existing, at that voltage, with that agreed capacity. Moving the site to Northern Scotland would remove £7,098.56 and leave £67,677.75 untouched.

Why it went up

The same site, on the same assumptions, priced at the final 2025/26 tariffs. It sat in band HV3 in both years: the band covered 1,000 to 1,800 kVA in 2025/26 and 1,100 to 2,000 kVA in 2026/27, and 1,500 kVA is inside both.

Residual 2025/26, 365 days at £121.795409

£44,455.32

Locational 2025/26, 1,100 kW at £7.405345 per kW

£8,145.88

Total TNUoS, 2025/26

£52,601.20

Total TNUoS, 2026/27

£74,776.31

Increase

£22,175.11, or 42.2%

The locational element fell. London went from £7.405345 to £6.453239 per kW. The whole of the increase, and more, is the residual, and the reason is visible in one figure: the revenue NESO recovers through the demand residual rose from £3,836.05 million in 2025/26 to £6,265.17 million in 2026/27. That is the answer to why a transmission charge rose on unchanged consumption. It is also why cutting demand at the triad did nothing about it.

Where it appears on your invoice

There is no standard line name. These are the forms we see, and what each one is likely to contain. The unit beside the figure is more reliable than the wording.

A combined line is legal and common, and it usually carries the distribution charge and the balancing charge alongside transmission. It also means an overcharge on the residual can sit underneath an undercharge on the locational element and the sum will look right. You can ask a supplier in writing for the breakdown, and for a business claiming network charge compensation under the energy intensive industries scheme obtaining that detail is explicitly the responsibility of the applicant.

How to check it

TNUoS is one of the more checkable lines on a business invoice, because both of its rates are published before the year begins and neither of them is negotiated. The errors concentrate in the inputs rather than in the rates.

• The zone. It comes from the distributor identifier at the front of the meter point number, through the grid supply point group, to one of fourteen zones. A site priced in the wrong zone is wrong by the whole locational element, and in seven zones the correct answer is nil.
• The band. Voltage plus agreed capacity, or annual consumption where there is no agreed capacity. One band step at high voltage is the difference between £42,760.77 and £67,677.75 a year.
• The days. The residual is a daily charge, so it should track the length of the billed period exactly and ignore consumption completely. A residual that moves with volume is not a residual.
• The charging year boundary. A period crossing 1 April carries two rates, and the split is by day. A single rate across the boundary is an error in one direction or the other.
• The triad element. Check the dates billed against the published triads for that charging year. A triad charge for a year whose triads have not been published yet is an estimate, whatever the invoice calls it.
• Reconciliations. A large transmission adjustment for an old period is normal. It has to be checked against the final tariff for the year it belongs to, not the year the invoice was issued in.

What is changing

Three things moved on 1 April 2026, and one larger change is still ahead.

The residual pot grew by nearly two thirds

Revenue recovered through the transmission demand residual rose from £3,836.05 million for 2025/26 to £6,265.17 million for 2026/27. Since the residual is a fixed daily charge, that increase reached every site in the country whatever it consumed and whenever it consumed it.

The bands were redrawn

Band thresholds are reviewed and reset at the start of each onshore transmission owner price control period, and 1 April 2026 was the start of one. The thresholds moved with it: high voltage band 3 covered 1,000 to 1,800 kVA in 2025/26 and covers 1,100 to 2,000 kVA now. NESO has stated that these thresholds will hold for the duration of the price control period, so a site that changed band this April has changed band for several years.

One code modification took effect

CMP463, stabilising the specific onshore expansion factors, was approved for implementation on 1 April 2026 and holds those factors at 2025/26 levels. It is the only concluded modification affecting the 2026/27 tariffs, and NESO gives it as part of the reason the zonal tariffs for zones 8 to 14 moved unevenly between its own draft and final publications for the year, alongside changes in nodal demand and embedded generation forecasts.

A larger review is coming

NESO writes in the same report that TNUoS charging is undergoing transition and that there will be substantial changes to charging mechanisms over the next few years, either through the Ofgem charging review or through code modifications. Nothing in that has landed yet. Three publications are scheduled before the tariffs change again: the five-year view of 2027/28 to 2031/32 by 30 September 2026, the draft 2027/28 tariffs by 30 November 2026, and the final 2027/28 tariffs by 31 January 2027.

Deep dives and edge cases

The main path above covers the site most businesses operate. These come up often enough to answer and not often enough to interrupt it.

Questions