UK Commons breaks down electricity bills

The House of Commons Library published a research briefing on May 13 setting out how household electricity bills in Great Britain are built up under the retail pricing system. The paper breaks a typical bill into four parts — wholesale energy, network charges, policy costs, and supplier costs and margins — using Ofgem’s price-cap framework as the reference point. The briefing arrives as electricity prices remain above pre-2022 levels, even after falling from the peaks reached during the energy crisis. It also says renewed disruption to oil and gas supplies since February 2026 has pushed energy prices higher again. ### What exactly did the Commons Library publish? The House of Commons Library said its paper, numbered CBP-10505, was published on Wednesday, May 13, 2026, as a research briefing on household electricity bills. The authors listed on the page are Paul Bolton, Thomas Hewitt, Gavin Lee, Iona Stewart and Matthew Tudball. The briefing says household electricity bills are made up of a unit rate charged for each kilowatt hour used and a daily standing charge. (commonslibrary.parliament.uk) It says the total bill depends on the tariff and on how much electricity a household consumes. ### How does the Library split the bill? Ofgem says the price cap reflects the costs suppliers face across the electricity system, including buying energy, using the network, meeting policy obligations and running supply businesses. (commonslibrary.parliament.uk) The Commons Library briefing uses those same broad categories to explain bill composition. The regulator lists wholesale costs as the price suppliers pay for energy on the market, network costs as the cost of building and improving pipes and wires, policy costs as support for government social and environmental schemes, and operating costs as supplier activities such as customer service, metering, marketing and debt handling. (commonslibrary.parliament.uk) Ofgem also includes supplier earnings, headroom, levelisation allowances and VAT in the cap methodology, but the Library briefing highlights four main components for reader-facing explanation. ### Which part is the biggest on a typical electricity bill? The Commons Library said wholesale costs were the largest single element of household electricity bills under the April-to-June 2026 price cap. For a direct-debit customer with typical annual electricity consumption, the briefing said wholesale costs made up £333, or 38%, of the £875 electricity bill used in its example. (ofgem.gov.uk) Ofgem says the Q2 2026 cap for a typical dual-fuel household paying by direct debit is £1,641 a year, and that the average electricity unit rate in that period is 24.67 pence per kWh with a standing charge of 57.21 pence a day. The Commons Library briefing uses the electricity-only figure to show how the cap’s underlying cost stack appears in a household bill. (commonslibrary.parliament.uk) ### Why doesn’t every upgrade show up as a separate line on the bill? The Commons Library says network charges cover the cost of transporting electricity and maintaining the system that delivers power to homes. Ofgem says those costs are built into the capped unit rate and standing charge rather than billed as separate consumer line items. That means a household may pay for network investment, policy schemes or supplier operations through bundled tariff charges rather than through a bill entry labeled for each program. (ofgem.gov.uk) The Library briefing presents the breakdown as an explanation of what sits behind the final tariff, not as a list of separately itemized charges on a monthly statement. (commonslibrary.parliament.uk) ### Who is this breakdown meant to help? The House of Commons Library describes itself as an impartial research and information service based in the UK Parliament. Its consumer energy research pages say household bills are made up of a variety of costs and place this briefing alongside wider material on bills, standing charges, energy efficiency and domestic energy markets. (commonslibrary.parliament.uk) For readers trying to connect infrastructure spending or policy changes to what they pay at home, the paper offers a bill-based frame tied to the regulator’s cap methodology. The Library says the four categories are used to explain what household electricity bills are made of and how those costs are changing. ### When will the next benchmark change? (commonslibrary.parliament.uk) Ofgem says it reviews and updates the energy price cap every three months. On its consumer guidance page, the regulator says the next announcement is due by May 27, 2026, covering the period from July 1 to September 30, 2026. The Commons Library briefing says the disruption linked to the conflict it dates from February 2026 did not affect domestic bills under the second-quarter cap but is expected to lead to higher prices under the third-quarter cap. (commonslibrary.parliament.uk) The next formal update will come from Ofgem’s Q3 2026 price-cap decision. (ofgem.gov.uk)