A new charging regime
Do you have Capacity?
As an electricity user with one or more Half Hourly Electricity Meters you will be affected by this Ofgem directive. DCP 161 is the new charging regime and it has cost implications for all sites with HH meters.
The key issue is to know whether you are exceeding your allocated capacity. If you are, then you could find yourself paying significantly more for the excess. The exact increase depends on your geographical location. However, it’s not all bad news. If you are constantly using less than your capacity there are ways of decreasing your costs.
EXCESS CAPACITY CHARGES WILL BE ON AVERAGE 73% HIGHER
Ofgem has approved an increase in charges when you exceed your allocated site capacity
What is DCP 161?
DCP stands for Distribution Change Proposal with DCP 161 reintroducing higher charges for excess capacity and is due to start on 1st April 2018. It only affects Half Hourly profile electricity meters. Previously, any capacity above your contracted amount has been charged at the same rate as your available capacity. From April 2018, if you exceed your contracted capacity you will incur a higher charge for the excess each month you went over.
How much more will I have to pay?
Excess charges are on average 73% higher than your available capacity charge although this does differ depending on your Distribution Network Operator (DNO). In several regions you will be paying double the standard price. Take a look at the map and table on pages 2 and 3 to see whether you fall in a region with a severe penalty for excess capacity.
Why are my charges changing?
This change has been implemented because the previous charging structure sent the wrong message to consumers. Previously, consumers could benefit by setting a capacity much lower than their actual maximum import capacity – therefore only ever paying for what they used. This potentially caused issues for the DNOs when managing current and planning for future load requirements.
The new charging structure is much more cost reflective for the DNO, however this excess charge is incurred for individual months rather than being in line with your annually set contracted capacity.
Therefore, a user could still set a contracted value lower than their maximum capacity and save money.
What can I do now to avoid paying excess charges?
You should be reviewing your contracted capacity across your business to make sure that you are aware of any sites which will incur excess capacity charges on a regular basis from April 2018. Additional analysis to determine how regularly you breach your contracted capacity can also influence whether you manage energy better at site or start the process to increase your capacity with your DNO.
Not sure if DCP161 affects you?
The changes to DCP161 means that you’ll be charged as soon as you exceed supply. This will only become apparent once you receive your next bill. If you’re not sure whether you’re currently on a half-hourly meter, we can check this for you. If you’re in the process of moving to a half-hourly meter your capacity may be set automatically at the incorrect level.