Standing Charges Predicted To Increase For 2026/27
Business electricity bills are set to significantly increase due to upcoming changes to the Transmission Network Use of System (TNUoS). This means that communal electricity supply costs will go up due to increases in standing charges, making your electricity more expensive – this increase is not related to usage. This rise will likely still apply, even if your energy commodity price is fixed.
Unfortunately, this also means that there’s very little that can be done to protect Management Companies / Freeholders or Leaseholders from these increased costs – but we can help you to prepare for them.
How much will this affect your development?
The effect that this has is likely to be dependent on the size of your block – large developments are unlikely to see much of an impact due to the economies of scale, however, smaller blocks are likely to notice the increase to a greater extent.
When will we know the increased costs?
Argent Partnership are including the new standing charge increases in their 2026/27 budgets, which will be reflected in your service charge budget when this is due.
Why, exactly, are the fees increasing?
TNUoS charges recover the cost of building, operating and maintaining the high-voltage transmission network across the UK. This consists of the pylons, overhead lines, substations – all aspects of the infrastructure that allows electricity to travel from substations into properties.
Business users – including blocks, developments and estates – typically pay these costs as part of their “standing charge” payments to suppliers. Rates are set annually by The National Energy System Operator (NESO) by the end of January, and applied from 1st April of that year.
Fees are expected to increase because:
- Fixed standing charges are expected to increase by around +94% compared to the previous financial year.
- NESO’s “allowed revenue” for TNUoS is likely to rise from around £5.1 billion in 2025/26 to around £8.9 billion in 2026/27.
- The TNUoS component of Standing Charges will likely rise from £0.76/day to around £1.60/day (according to several forecasts).
- Connection point, voltage, and meter types will continue to influence costs.
Why will this increase costs if we have a fixed energy commodity price?
Your contract with your supplier may treat this as a “pass-through cost” – an expense that they pay to a third-party for the provision of your service, which they can then bill directly back to you through the standing charge payment.
How does Jennings & Barrett’s Block & Estate Management service model benefit us, longer term, when it comes to ensuring consistent, good value utility supplies?
Though there’s nothing we can realistically do to protect you from these cost increases, by choosing Jennings & Barrett as your appointed Management Agent, you benefit in two ways:
1. You avoid becoming victim to the “resale” of Bulk Supply & Recharging of utilities.
Some Managing Agents enter into schemes where they take the responsibility (either onto themselves, or on behalf of an RMC) to sort out the charging of gas, electricity and water supplies to Leaseholders. This is actually a highly regulated activity, and if performed incorrectly, it leads to high unrecoverable costs for the RMC and creates cash flow issues – ultimately affecting supply across the whole block.
Jennings & Barrett’s approach is to always act in the best interest of our clients – we make sure we’re operating on principles of best practice, are transparent in our fees, and utilising the expertise of our strategic partners to deliver the best value and most consistent service that we can.
2. You get a greater level of transparency and protection:
Most Jennings & Barrett clients tender and contract their energy supply through Argent Partnership on our recommendation.
Argent Partnership is a specialist end-to-end provider for block management energy supply. They provide an efficient, effective service for procuring energy contracts. They ensure that:
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- Contracts are managed, reviewed, and terminated correctly.
- You get the best value when accounting fees and charges are aligned with support services and after-sales care levels.
- Meter readings can be taken remotely, where you have a smart meter installed.
- You receive appropriate advice on installing or updating energy infrastructure, such as smart meters or meters, in your development or buildings.
- Where billing disputes occur, Argent will raise these on your behalf – saving you valuable time.
Unlike using a broker, Argent Partnership is funded by the fees you pay them rather than by commission from Utility Suppliers. Like Jennings & Barrett, Argent is a route towards achieving greater levels of expert advice for your development, through their independence and transparency.
In short – you get access to a level of contract knowledge, administrative support, and expert energy advice from an independent provider, beating any service that a Property Managing Agent is able to offer in-house.
Would installing communal renewables help protect us from these rising costs?
We’re always keen to investigate the potential of innovation and new technologies, and are happy to advise you on where you can gain a higher level of understanding on renewable energy production for your specific development, if you share this interest.
This said – whilst renewable energy generation installations can help reduce the unit rate you pay in some cases, it would not affect your standing charge costs.
This is because the costs that contribute towards standing charges – such as the aforementioned infrastructure, metering, administration, and industry costs – are not linked to how much energy you use.
Looking for a Managing Agent you can trust?
Let’s talk about your development today.