Operating costs currently make up 15% of an electricity bill and 16% of a gas bill (15% and 17% from January 2026).
There are three components to these costs:
- The Core operating costs cover the operational cost of serving customers who are on a Direct Debit contract (the majority of the customer base). These costs include metering, billing, customer service and the like.
- Payment Method Adjustment Allowances cover the administrative costs related to serving customers on other payment methods, namely standard credit and prepayment metres.
- The Smart Meter Net Cost Change funds the nationwide rollout of smart metres.
