A significant change to half hourly electricity supplies is being introduced by the government regulator which could result in costly charges to end users.
Ofgem is bringing in a new measure, known as DCP 161, from April 1, 2018…it may seem a long way off, but those affected should act now to ensure they don’t get hit with a financial penalty.
What is it and why might you need to know about it?
DCP 161 is being brought in to ensure electricity users who exceed their agreed half hourly capacity will be charged at an excess penalty rate. In certain circumstances, this could be up to three times higher than the standard rates, most notably in areas where there is a higher demand for capacity.
Currently, if a supply exceeds its available capacity no penalty is charged, the excess is just charged at the prevailing rate. So there’s been no real incentive for users to actively increase capacity. DCP 161 will change all of this.
Electricity meters converted or converting as a result of P272, legislation introduced by Ofgem in November 2015 (read our earlier blog here), need to be aware.
We always discuss these issues with our clients as part of our ongoing engagement, but now it’s essential to take action for those regularly exceeding their maximum demand levels.
So what can you do?
Those who are moving to half hourly meters are potentially vulnerable as they may not know their available capacity and should seek advice to establish the agreed capacity. Also, if you have any supply or capacity contracts due for renewal between now and April 2018, it would be prudent to negotiate your capacity charges, as excess charges will be based on the supplier you choose.
Again, this is something that we regularly discuss with clients, but for those that have exceeded their capacity for years, safe in the knowledge that there are no penalties, now is the time to act. Similarly, if you think your demand is set too high, we can help with that too.
As with any change, there will be winners and losers. But with this change, there is likely to be more losers because users are currently receiving extra capacity at no extra cost other than the standard rate.
If you want to increase your available capacity or are looking at ways to reduce your energy consumption and avoid excess charges, please call us on 024 7699 7901.