Cost Stack

The cost stack is the order in which costs accumulate to form a final tariff. Each layer sits on top of the one below, and each is calculated independently before the totals are summed.

The deterministic layers (the bottom ~90%)

• Wholesale energy — the commodity cost (Elec or Gas) for the contract period
• Network charges — DUoS for distribution, TNUoS for transmission, BSUoS for balancing
• Policy levies — Capacity Market, CfD, CCL, Nuclear RAB, AAHEDC (and gas-equivalent for gas supplies)
• Metering — meter operator costs and data services
• Operating costs — supplier admin, billing, customer service

These are deterministic because the rates are published and the methodology is defined. Given a meter, a region, and a consumption profile, every supplier should arrive at very similar numbers.

The commercial layers (the top ~10%)

• Margin — the supplier's profit
• Hedging strategy — how much of the wholesale exposure is locked in vs floating
• Shape risk uplift — premium to cover the difference between a customer's load shape and a baseload hedge
• Imbalance risk — premium to cover settlement period imbalance
• VAT — 5% for domestic, 20% for non-domestic

These are commercial choices, not sourced facts. Pricing Engine surfaces them in the Assumptions drawer rather than baking them in.