Read this blog to find out about the new DCP161 measures introduced by OFGEM and how businesses who use electricity face the risk of large cost increases if they do not review their electricity usage before  1st April 2018.

So what is DCP161?

It is a measure being introduced by OFGEM, the energy regulator, to help recover additional costs that will be incurred by Distribution Network Operators (companies who operate the National Grid) after 1st April 2018. The costs will be recovered by charging Customers for using more electricity than their current ASSIGNED AVAILABLE CAPACITY.

How much more could you be charged?

Penalty rates for exceeding the ASSIGNED AVAILABLE CAPACITY will vary from three times your tariff cost per kVA to as much as six times your cost per kVA.

Why is this happening?

The UK National Grid is becoming smarter with more focus on using power produced locally rather than trying to transport power across large distances which is inefficient.  To do this the power & distribution companies require accurate information on local electricity usage.

Currently customers with half-hourly meters have an ASSIGNED AVAILABLE CAPACITY within their electricity contract which is supposed to represent their normal peak load use, this is the amount of power the local supply needs to allow for in their production and local distribution.

For the new smarter system to work customers need to stay within their ASSIGNED AVAILABLE CAPACITY. That is why OFGEM is introducing penalties under DCP161 for exceeding this capacity from 1st April 2018.

How much could this change cost me?

That will depend on your contract and usage, but a medium sized business energy user could be faced with costs of £hundreds per month, so this represents a large risk to cashflow and the business’ financial resilience.

HOW TO DEAL WITH THIS RISK:

Find out if you are on a DCP161 vulnerable supply. The easiest way to do this is take a picture of your MPAN (see below image) and send it to our partners at Utility Alliance who will confirm by return email whether you are at risk.

If you are at risk then Utility Alliance can assess your usage and let you know if you could suffer penalty charges. They can then advise you on the best options to deal with the problem.

Will I need to change supplier?

No. If the problem is a peak use due to a particular demand in your production or business process, for example starting up big machinery at a set time in the day, you can look at energy efficiencies such as battery storage to help.

Other options are renegotiating the contract to have the correct ASSIGNED AVAILABLE CAPACITY levels.

An opportunity to save costs!

Many customers with half-hourly meters have no idea they are currently paying for ASSIGNED AVAILABLE CAPACITY. Over recent years businesses have implemented energy efficient schemes that have taken peak usage below their maximum assigned capacity. Since you pay a monthly charge for this capacity based on the maximum usage, there can be savings to be made by assessing and reviewing energy use.

If you would like help on this subject please leave your details on the form below and one of the Utility Alliance team will call you to discuss the best way to assist you.

ASSIGNED AVAILABLE CAPACITY. This terms is used by your electricity supplier within your agreement to set the maximum power usage they expect to supply to you. There is a charge for making this power capacity available to you, normally calculated as a daily rate charged per kVA and added to your monthly bill.