NCC Charge: What It Funds, Bill Impact, and 2027 Changes

The NCC charge on electricity bills is money collected from suppliers, and passed through to customers in the unit rate, to fund the Network Charging Compensation Scheme, which reimburses roughly 320 energy-intensive manufacturers for 90% of the charges they pay to use the electricity grid. For a typical household, the cost works out at about £3 to £5 per year at the original 60% compensation rate, rising by an estimated £1 to £2 more once the 90% rate feeds through.¹² You will not see it as a separate line item; it is folded into the unit rate.

What the Charge Funds

The Network Charging Compensation Scheme is part of the British Industry Supercharger package, launched to help energy-intensive manufacturers stay competitive with rivals in France, Germany, and the Netherlands. Analysis by Ofgem covering 2016 to 2020 showed British manufacturers paying around 50% more for electricity than counterparts in those countries.³

Part of that gap comes from the fees every user pays to move electricity across the grid: Transmission Network Use of System (TNUoS), Distribution Use of System (DUoS), and Balancing Services Use of System (BSUoS) charges. The NCC Scheme lets eligible firms pay those charges in full and then claim 90% back. It does not cover private wire networks, gas, or new grid connections.³

How Much It Adds to a Typical Household Bill

Ofgem formally built an NCC allowance into the energy price cap from April 2025. It was set at £2.78 per typical customer for the first six-month cap period, with the enduring household cost estimated at £3 to £5 per year.¹

That figure covered the original 60% compensation rate. When the rate rose to 90% on 1 April 2026, the government estimated the additional household impact at £1 to £2 per year. Combined with the other measures in the Supercharger package, the total effect on a household is estimated at £5 to £7 annually.²

How Much It Adds to a Non-Eligible Business Bill

Businesses that do not qualify for the scheme still pay the levy through their electricity supplier. The uplift from 60% to 90% alone is estimated to add about £0.40 per MWh to non-domestic bills. On that basis:

A small manufacturer using 2,400 MWh a year would pay roughly £960 more.
A pub using 48 MWh a year would pay roughly £19 more.

Those figures reflect only the incremental cost of the uplift, on top of the original scheme charge already being recovered.²

Why It Appears on Your Bill

The scheme is funded through the EII Support Levy, charged to licensed electricity suppliers based on their market share. Suppliers have been paying the levy since April 2025, and they recover the cost from all electricity consumers, including households and businesses that are not eligible for compensation, through the unit rate.¹

Because it sits inside the unit rate, there is no standalone “NCC” line on a standard domestic bill. If your supplier itemises non-commodity costs on a business bill, you may see it listed separately there, but the mechanism is the same: the supplier is passing through a levy set by government and administered by Elexon.

Who Gets the Money

Around 320 firms hold the EII certificate required to claim, supporting an estimated 80,000 direct jobs across Great Britain. The eligible sectors include steel, chemicals, glass, ceramics, paper, cement, fertiliser, and parts of the automotive and aerospace supply chains.⁴

Steel is the most electricity-hungry of the eligible sectors. UK Steel reports that the industry’s electricity consumption is equivalent to that of 800,000 homes, and power costs represent up to 180% of producers’ Gross Value Added. The 90% rate is expected to save the sector £14.5 million a year, though because compensation is paid roughly 13 months after the charges are incurred, steelmakers will not feel the benefit of the uplift until 2027.⁵

Elexon publishes an Estimated Levy Fund figure each month. During April to December 2025, claims at the 60% rate were running at roughly £18 million to £25 million per month; in the preceding year (April 2024 to March 2025) monthly totals ranged from about £15.7 million to £22.2 million.⁶

What Changes in 2027

The 90% compensation rate took effect on 1 April 2026, but the levy paid by suppliers has not yet been increased to match the higher payouts. The EII Support Levy will be raised from 1 April 2027 to cover the additional cost.² That is when the estimated £1 to £2 uplift for households, and the £0.40 per MWh uplift for non-eligible businesses, will fully feed through into bills.

Criticisms of the Charge

The scheme has drawn objections on several fronts, all set out in the government’s October 2025 consultation response. Some energy suppliers and stakeholders argued that the cost burden falls disproportionately on households and businesses that are not eligible for compensation, and called for greater transparency about which firms benefit and by how much. The government has so far declined to publish anonymised participation or spending data.²

Others pressed for the scheme to be broadened, arguing that many businesses face high electricity costs and international competition but sit outside the current list of eligible sectors. Some respondents proposed spreading the funding more evenly across the energy system, including from gas rather than electricity alone. A few flagged a subtler concern: that generous compensation could reduce the incentive for large industrial users to curtail consumption at peak times, weakening their contribution to grid flexibility.

Even supporters have noted limits. Some respondents pointed out that even at 90%, UK electricity prices remain higher than in competing jurisdictions such as Texas, so the gap the scheme was designed to close has narrowed rather than disappeared.