What the recent shifts mean for you and your company’s gas and electricity bills
Utility costs were once predictable operational expenses for business owners and directors.
But the combined blows of the pandemic, the invasion of Ukraine and the ongoing cost of living crisis have made them become another critical factor influencing their financial stability.
While it’s true that wholesale energy prices dropped in February 2025, they remain considerably higher than their pre-2022 levels with the market undergoing significant regulatory and structural changes to add to the confusion and prevent appropriate planning.
In this article we’ll break down the key energy market reforms that will affect your business; how they could impact operations and the steps you could take if the rising gas and electricity costs threaten the very viability of your business.
The Energy Market Transformation: MHHS; TNUoS and the RAB Levy
Several major changes are rolling out or upcoming that are being driven by modernisation and funding requirements for the UK’s energy infrastructure:
- Market-Wide Half-Hourly Settlement (MHHS)
The MHHS program is a UK energy market reform led by Ofgem that requires all electricity usage to be settled using half-hourly (every 30 minutes) data. This shift transforms how suppliers pay for electricity by matching what customers use in 30-minute intervals, moving away from estimates or periodic readings.
How this affects you:-
- Smarter, more accurate bills: Bills will more closely match actual usage, providing greater transparency and fewer billing surprises
- Time-of-use tariffs: MHHS encourages suppliers to design new, innovative tariffs, particularly time-of-use products. These tariffs reward businesses that shift their energy consumption away from peak periods, offering better cost control especially for businesses with shift-based operations.
- Rollout timeline: The transition began in September 2025 and aims for all trading and settlement to use half-hourly data by October 2026 with full implementation by May 2027.
- Contract changes: You will see visible changes to contracts and bills. Key identifiers like MPANs will be updated and new terminology such as Standard Settlement Configuration (SSC) and Distribution Use of System (DUoS) Tariff ID will replace older codes like MTC and LLF on paperwork issued after September 22nd 2025.
- Rising Transmission Network Use of System (TNUoS) Charges
TNUoS charges are collected to cover the cost of maintaining and operating the high-voltage electricity grid in Great Britain.
How it will affect you:
- Increased Standing Charges: TNUoS charges are expected to rise from April 2026. This increase is primarily driven by the major upgrade needed for the UK’s electricity grid to meet net zero targets, along with changes to charging band rules. For many businesses, this will likely translate into higher fixed standing charges.
- Nuclear Regulated Asset Base (RAB) Change Levy
The Nuclear RAB Change Levy is a new non-commodity charge added to all UK electricity bills, both business and domestic.
How it will affect you:
- New Mandatory Cost: Starting from November 2025, this levy will appear on your bill, intended to fund the construction of new nuclear projects such as Sizewell C. Although the initial levy is described as small, it represents an extra cost for all consumers, designed to spread risk and support long-term, low-carbon power.
- The Domestic Price Cap Increase
The energy price cap rose by 2% on October 1st 2025. However, it’s important to remember that business energy rates and standing charges are uncapped.
How it will affect you:
- Market Signal: Although the price cap only applies directly to domestic energy customers, an increase often signals general price rises across the board. Because there is no cap on business energy rates, companies usually fix their contracts to avoid defaulting onto high out-of-contract rates.
Plan to take action now: preparation and cost reduction
Given the continued high-cost environment and upcoming structural changes, directors should look to prioritise efficient energy management and procurement.
As an example the average prices various businesses would pay as at October 2025 are:-
| Business Size | Annual Gas Usage (kWh) | Estimated Annual Gas Bill | Annual Electric Usage (kWh) | Estimated Annual Electric Bill |
| Micro | 10,000 | £915 | 10,000 | £2,735 |
| Small | 22,500 | £1,799 | 20,000 | £5,553 |
| Medium | 47,500 | £3,650 | 40,000 | £11,193 |
| Large | 65,000 | £5,377 | 55,000 | £13,507 |
Review and renew your business energy contract
- Fix your rates: to ensure price certainty and protect against price volatility, look to secure a fixed-rate contract. Out-of-contract rates can be up to 35% more expensive than a fixed contract.
- Understand contract differences: Unlike domestic energy, business contracts are bespoke and fixed-term, typically lasting one to four years. There is no cooling-off period and cancelling early can incur significant termination fees.
- Start early: You can begin comparing quotes and lining up a new contract up to ten months before your current one ends.
Embrace MHHS technology and tariffs
- Install a smart meter: Smart meters are integral to MHHS, providing real-time data on consumption. While you will still be settled half-hourly without one, having a smart meter is recommended in order to access the full benefits of MHHS and innovative tariffs.
- Consider time-of-use tariffs: getting advice from an energy broker or a comparison service to determine if shifting usage away from peak times and adopting a time-of-use tariff could save the business money.
Implement energy efficiency measures
Obtaining the best deal is one important step to reducing bills but there are other actionable steps that can be taken to further decrease usage:
- Switch off appliances: A simple but effective way of reducing power output is to make sure equipment and printers are switched off when not in use.
- Upgrade lighting: Replace traditional lighting with energy-efficient alternatives such as LED bulbs which consume significantly less energy.
- Go paperless: Transitioning to digital communication and document management reduces the energy associated with printing and copying.
When costs become untenable: navigating insolvency options
High energy costs can erode financial stability, sometimes enough to push a business into a financial danger zone.
Directors should be aware of key indicators and danger signs that are pushing a business towards insolvency:
- Persistent cash flow issues: Difficulty paying essential bills; suppliers; staff and/or HMRC on time.
- Erosion of profits and reserves: Cash reserves are dwindling faster than they can be replenished.
- Running to stand still: Borrowing money solely to maintain operations without a clear, profitable plan to repay the debt.
- Risk of wrongful trading: Directors are committing an offense if they continue trading when there is no reasonable prospect of the company becoming profitable or trading while insolvent.
Exploring financial and insolvency options
If initial steps such as efficiency improvements and renegotiation aren’t enough to ensure the company’s long-term survival, directors need to understand that formal insolvency and rescue routes are available to them:
Company rescue options:
- Company Voluntary Arrangement (CVA): A formal procedure allowing a company to propose a deal to its creditors regarding the payment of its debts over a fixed period.
- Administration: Most often used to rescue a company as a going concern or achieve a better result for creditors than placing the company into liquidation.
- Time To Pay (TTP): Arrangements often used to negotiate terms with HMRC on outstanding arrears.
Company closure options:
- Creditors Voluntary Liquidation (CVL): Used when the company is insolvent and directors choose to close the company.
- Compulsory Liquidation: When creditors take the initiative and successfully petition the court to wind up the company.
If insurmountable energy bills are eroding your company’s financial stability then it’s imperative to seek professional, impartial help. It’s why we offer a free initial consultation to any director or business owner who feels they need one.
The sooner advice is taken and implemented, the more options are usually available for a director – especially if their ultimate aim is to keep the lights on.