Ofgem has confirmed that the changes proposed under modification CMP308 relating to Balancing Services Use of System (BSUoS) charges have been approved for implementation from 1 April 2023.
What is the BSUoS charge?
The BSUoS charge recovers the cost of the day-to-day operation of the transmission system delivered by National Grid. This includes the costs to suppliers for delivering the power and business costs including staff, buildings and systems.
Commodity and non-commodity energy costs
Previously customers would pay approximately half of the BSUoS cost as part of their non-commodity costs and the other half would be part of the energy price (commodity cost). Going forward, the whole cost will be charged as the BSUoS element in the non-commodity costs, making it simpler and more transparent.
BSUoS costs have increased in recent months, driven by the exceptional rise in gas and electricity costs and unseasonably low wind load factors. This led to National Grid ESO having to procure generation from ordinarily idle power stations at extremely high prices to meet demand which exceeded their forecasts.
This change will cause BSUoS costs charged to end customers to roughly double once it takes effect on 1 April 2023.
How will this affect customers?
Our team has ensured that all customers have contracts with the non-commodity costs fixed until their next contract renewal so won’t be affected by the change in April 2023.
Any new customers and those with renewals before April 2023 are being advised about the increase which will be built into their contract rates.
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