Capacity charge penalties are no April Fool
From April 1st, Ofgem will enforce DCP161, resulting in higher energy costs for many customers. This has the potential to affect all customers who have a Half Hourly electricity supply, as they will start being penalised for exceeding their available capacity. Read more for full details of what this entails and what you can do to ensure you are compliant.
What is DCP161?
DCP161 was introduced by Ofgem and will penalise customers on a Half Hourly supply who consume more than their available capacity. When the legislation takes effect, customers using more than their available capacity, will have an excess capacity charge levied against them in the form of a penalty.
Why is DCP161 being enforced?
Each Half Hourly (HH) meter has an agreed available capacity; the maximum capacity that each customer has reserved on the local Distribution Network for their energy usage. When businesses pull in excess of this agreed capacity it puts additional unexpected stress on to the network, which in turn can cause damage.
Ofgem are introducing this new measure to ensure half hourly supplies that exceed their agreed available capacity will pay significantly more. This extra charge is being introduced so the DNO’s can recover the additional costs which help in maintaining/fixing and upgrading the network.
How will DCP161 affect your business?
There is currently no penalty charge if you exceed your available capacity. You are simply billed for the amount of additional KVA at the standard rate. This is why exceeding your HH supply until now wouldn’t have been much cause for concern.
From April 1st however, this will all change. If you exceed your available capacity from this date onwards, you will incur an excess capacity charge each month, which will result in significant costs over time. The penalty rate will vary depending on voltage and by region, but could be up to three times more than the standard rate currently being paid.
What can you do to ensure you are DCP161 compliant?
You should check your invoices to see if you are regularly exceeding your HH supply and paying excess charges. You can analyse your HH supply data to see the highs and lows of energy consumption and determine whether it is possible to reduce energy consumption without having to increase your available capacity.
We understand that your billing and HH data are complex and not easy to decipher. We at Businesswise Solutions can use our expertise to ensure you are best aligned in your HH supply contracts and compliant when the new legislation comes into force.
Contact your Account Manager in the first instance or firstname.lastname@example.org