Non pass through
A non pass-through contract builds the supplier's estimate of third-party costs into your fixed price.
What it is
With a non pass-through (fully fixed) contract, the supplier takes the risk on third-party costs such as TNUoS, DUoS and BSUoS. Those costs are included in your unit rate and standing charge, and do not change during the term unless the contract says so. The opposite is pass through.
Where you will see it
- On quotes labelled "fixed", "all-in" or "non pass-through".
- In contract terms that state the price is fixed for the term.
Why it matters
The big advantage is a predictable bill, which makes budgeting easier for a café or office. The trade-off is that the supplier prices in a safety margin, so the headline rate often looks higher than a pass-through quote. If network charges fall, you do not benefit. Some fixed contracts still include clauses allowing changes in specific cases, and these vary from contract to contract, so read the terms; see can a supplier change my fixed price.
Example
A salon compares a fixed 27.0p/kWh quote with a pass-through one at 24.0p plus charges. If charges end up at 2.5p, pass-through costs 26.5p, slightly cheaper. If they reach 3.5p, it is 27.5p, dearer. At 15,000 kWh, the 0.5p difference is 15,000 x £0.005 = £75. The fixed quote buys certainty, not necessarily the lowest price. Use the cost calculator to test your figures.
Related terms
Common questions on this topic
- Why has my business energy price risen at renewal?
- What happens if I don't renew my business energy contract?
- How do I find my business energy contract end date?
- How far ahead can I agree a new business energy contract?
- What is a rollover contract and how long can it last?
- Is a phone agreement a legally binding business energy contract?
Sources
General information only. Energy prices, rules and supplier terms change; check the latest position with your supplier, Ofgem or the Energy Ombudsman before you act.