Distribution Use of System (DUoS) costs explained

The information in this video and article was accurate as of 1 April 2025. We update our TPCs Explained hub every Spring to reflect any changes.

What’s the Distribution Use of System (DUoS) cost?

The DUoS charge pays for the use, upkeep, and expansion of the distribution networks that supply electricity to homes and businesses. These networks can include large-scale pylons, the smaller-scale pylons you might see around a housing estate or business park, sub-stations, as well as underground assets.

How does DUoS work?

After typically being transmitted across the country via the high-voltage network, electricity enters the local distribution network. The Distribution Network Operator (DNO) delivers the power to homes and businesses, charging electricity suppliers for that delivery. Electricity suppliers then pass on that cost to their customers.

How much of your energy bill does DUoS account for?

For many users, DUoS is the second largest third party cost in the electricity bill. In 2025, it’s likely to make up around 14% of the average total bill for low voltage site-specific customers.

The cost of DUoS – and therefore its proportion of the total bill – varies by connection voltage and whether the customer is seen as part of an energy intensive industry.

How are DUoS costs recovered?

DUoS costs are recovered by DNOs from energy consumers – via their electricity suppliers – to pay for the delivery and maintenance of the local electricity network.

DNOs set DUoS charges annually, publish them in a tariff schedule, and bill the relevant suppliers.

How is the DUoS fee structured?

There are 14 different DNO regions across the UK, all with their own charges. In each region, the local DNO sets all the DUoS charges.

The charges usually comprise a fixed daily fee, variable usage fees, and a daily capacity fee that smaller sites may not be liable to pay.

How do the DUoS usage fees work?

For most users, the DUoS usage fee comprises a red, amber, and green system that provides a pence per kilowatt unit rate. This unit rate is multiplied by a customer’s actual or profiled consumption for each half hour.

• A red unit rate applies during peak hours (usually 4pm-7pm)
• A green rate applies to less busy times – like overnight and early morning
• Amber is the middle rate, which applies during the so-called shoulder periods

While this is a typical usage fee structure, a few regions do vary. London, for example, has a midday peak.

A few very large sites are connected at extra high voltage – typically 22kV-132kV in England and Wales – and they have site-specific charges unique to them. These charges comprise a fixed charge and a capacity charge (much like lower voltage customers). However, they also have a ‘super red’ unit rate that only typically applies over the winter peak period between November and February, from 4 to 7pm.

Will you know about DUoS costs in advance?

Yes - DUoS charges are set 15 months in advance, although this notice period can be shortened in exceptional circumstances. The annual cost to your business will depend upon your usage and capacity agreements.

What drives the DUoS charge?

There are three main drivers of the DUoS charge:

• Regulatory change – this can alter how the charge is recovered, or rebalance the relationship between unit charges and fixed charges. Alongside code governance, regulatory change can result in alterations to the distribution and connections use of system agreement (DCUSA)
• Changes to DNO allowed revenues, which could be driven by a range of factors:
  
  • Investment requirements in the local network
    
  • Changes to input assumptions, such as inflation
    
  • Over- or under-recovery
• Usage assumptions, and the number of users on the network

To learn more about the other TPCs in your energy bill, head to our TPCs explained hub using the button below. Or, to understand more about electricity prices, download our latest bi-annual Electricity Prices Explained guide.