2027-28 distribution tariffs reveal wide ranging impacts

At the time of writing, DNOs have yet to confirm final 2027-28 DUoS for the following regions:

• East Midlands
• West Midlands
• Northern Scotland
• Southern

These regions are excluded from the calculation of confirmed year-on-year changes below, and final tariffs for all DNO areas are expected no later than 27 February 2026.

Highlights:

For our “typical” LVSS RB2 customer, the key highlights are:

• Annual DUoS costs will increase by 16.3% or £1,079/year on an arithmetic average basis.
  
  o The largest confirmed increase is in the North West region, where annual DUoS costs rise by 64%. However, this significant increase is due to tariffs falling substantially in 2026-27. Compared to 2025-26 tariffs (current tariffs until 31 March 2026), North West DUoS tariffs are only expected to rise 3%.
  
  o The smallest year-on-year (y-o-y) increase is expected in Manweb; only a 3% uplift compared to 2026-27 rates.
  
  
• Drivers for the movements vary:
  
  o The South Wales, Southwest, Eastern, South Eastern, and Northeast regions will all see significant increases to the fixed tariffs (+98% to +368% y-o-y).
  
  o The North West, Eastern, London and South Eastern regions all see substantial increases to unit peak, shoulder, or off-peak unit rates.
  
  
• Fixed charges increase materially on average, rising by around 58% across regions. Some regions have more than six times this increase.
• Other user types could see very different trends in prices depending on DNO input assumptions and data points.
• Therefore, while DUoS will increase on average, the exact implications for each user will depend heavily on their location and consumption profile.

Regional movements

While tariff movements vary substantially across regions, they’re not as divergent as tariffs between the current charging year at the time of writing (2025-26) and 2026-27. When these tariffs come into effect on 1 April 2026, movements for our LVSS customer will range from -37% to +60% in costs.

The graph below outlines how DUoS costs have moved between 2025-26 to 2026-27 (turqouise bars), 2026-27 to 2027-28 (navy bars) and the aggregate movement between 2025-26 and 2027-28 (the purple dot). As we mentioned in the highlights, the increase in the North West region will represent an approximate return to 2025-26 charging levels, with an aggregate increase of only 3% between 2025-26 and 2027-28.

The following graph helps explain how DUoS tariffs have moved for our “typical” customer in the North West region since 2021, and the composition of the overall cost.

Unlike other regions where fixed charges dominate changes, the increase in total cost in the North West region is driven primarily by unit rates. Both amber and green charges have risen by more than threefold. This significantly increases DUoS exposure for customers with material consumption outside peak red periods and highlights the continued importance of load profile in determining regional outcomes.

Alongside this, fixed charges exhibit the largest proportional movements across regions in 2027/28, contributing materially to the overall cost movements. Several regions see sharp increases in fixed charges from a low base, with rises of around 295% in the South West and 368% in the South Eastern region. These increases play a central role in explaining why regions such as South Eastern and Eastern record some of the largest overall DUoS increases despite more moderate changes in unit rates and capacity charges.

Deadlines for the remaining tariffs

While most DNOs published their 2027-28 DUoS charges in line with the standard timetable, Ofgem granted derogation (a deviation from the normal publishing schedule) to two DNOs across four regions. This allowed for later publication. r. As in previous years, these derogations were driven by issues within the charging methodologies, where the application of the models would have resulted in excessive residual surpluses.

Ofgem permitted the delays to allow the DNOs to adjust their approaches and publish a complete and compliant set of tariffs. For the 2027/28 charging round, derogations were granted to National Grid Electricity Distribution (NGED) covering the East Midlands and West Midlands, and Scottish and Southern Electricity Networks (SSEN) covering Northern Scotland and the Southern region. SSEN in-area charges are required to be published by 31 January 2026. NGED East and West Midlands charges must be published as soon as reasonably practicable, and no later than 27 February 2026.

Other user types

Other user types aren’t guaranteed to face the same movements in tariffs as those for the LVSS RB2 user. For example, our chart below reveals the annual movements in DUoS for a HVSS RB2 consumer. While the North West region still sees a significant increase, other regions see very different movements. The 34% decrease in Southern Scotland for the HV user compares to a 9% increase for the LV user. Therefore, we advise power consumers to assess the potential impacts of DUoS changes on their portfolio based on their own consumption profiles.

Disclaimer

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