Glossary of terms T-X
T
TARGETED CHARGING REVIEW (TCR)
Visit our dedicated page to find out more about Ofgem's Targeted Charging Review (TCR).
TRANSMISSION LOSSES
Transmission losses are charges related to energy losses in the transmission system that occur as it is transported from the point of generation to the grid. Transmission losses are published daily by Elexon.
TRANSMISSION NETWORK USE OF SYSTEMS (TNUOS)
Transmission Network Use of System (TNUoS or TUoS) charges are calculated for each MPAN for the full year and billed equally every month.
Suppliers are billed monthly and the cost of this charge is either recovered in your unit rate (fully delivered product) or as part of a pass-through charge.
WHAT A TNUOS CHARGE COVERS
TNUoS charges cover the cost of using the National Transmission System, owned and operated by National Grid, to deliver electricity from power stations to your business. TNUoS charges only apply to half hourly (HH) MPANs.
TRANSMISSION NETWORK USE OF SYSTEM (TNUoS) RESIDUAL CHARGE
TNUoS tariffs aim to be reflective of the cost of using the network, to help network users make efficient decisions about where and when to use the network.
Tariffs are broken down as below:
1. The Locational charge (wider TNUoS) – calculated by the Transport model - this reflects the incremental cost of power being added to the system at different geographical points.
2. The Residual charge (wider TNUoS) – what is not recovered under the Locational charge is recovered in this charge so that the Transmission Owners recover their total allowed revenue.
3. Adjustment charge (ensure that the generation tariffs are compliant with EU legislation (€2.50 gen cap))
TRIAD CHARGES
A Triad is one of the three highest peaks of electricity demand identified by the National Grid that fall between November and February each year:
They occur in a half hour period between 4pm and 6pm on winter evenings, when industry demand and residential demand coincides
There must be at least ten days between individual Triads
They tend to occur during the three coldest periods of winter.
Triads are used to calculate the Transmission Network Use of System (TNUoS) charges a business with half-hourly metering will incur. Further to Ofgem’s Targeted Charging Review (TCR), changes to the way Transmission Network Use of System (TNUoS) charges are calculated mean that Triads will still exist but will impact costs to a lesser extent compared with previous years.
U
WHAT ARE USAGE CHARGES?
Your energy usage is measured in kilowatt hours (kWh). The unit rate is the amount you're charged in kWh for the gas and electricity you use. One kilowatt hour is roughly the amount of energy it would take to keep a laptop powered for two days.
V
WHAT IS VAT AND AT WHAT LEVEL AM I CHARGED?
VAT stands for Value Added Tax. It is charged at either the Standard rate (20%) or at the Reduced rate (5%). If your premises qualifies for reduced rate VAT, you must complete a VAT declaration form and submit this to us so that we can apply it to your account.
Reduced rates
Under HMRC rules as of April 2012, reduced VAT applies to charities and businesses that qualify for domestic use, which are currently defined as:
armed forces residential accommodation
caravans
children's homes
homes for the elderly and disabled
hospices
houseboats
houses, flats or other dwellings
monasteries, nunneries and similar religious communities
school and university residential accommodation for students and pupils, or
self–catering holiday accommodation
Mixed use
Mixed Use VAT applies when some of a business’ energy is purchased for domestic or charitable purposes. In this instance, the organisation may be entitled to obtain a VAT Certificate from HMRC that entitles them to have a proportion (1–100%) of their energy bills qualify for Reduced VAT. Where a qualifying business carries out business and domestic or charitable activities at the same premises, and at least 60% of the activity is certified as "Non–Business" the whole invoice will qualify for Reduced Rate VAT.
The de minimus rule (see Climate Change Levy for more information) also applies to VAT charges. That is if the average consumption of all MPxNs falls below 33 kWh of electricity or 144 kWh of gas per day, then Reduced VAT (5%) may be applied. This logic is applied on a bill–by–bill basis and as such, it’s possible that a customer over time may observe reduced rate on some invoices and standard rate on others, depending on their consumption.
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XOSERVE
Xoserve is a private company delivering transportation transactional services on behalf of all major gas transportation companies.