As of 1st April, DCP161 will be effective. Introduced by Ofgem, this new regulation will allow utility companies to charge a penalty rate when their commercial customers draw more power than expected. DCP161 changes the Distribution Connection and Use of System Agreement (DCUSA) and will introduce Excess Capacity penalties for Half Hourly (HH) electricity supplies. This change will be introduced to offset the costs that Distribution Network Operators (DNOs) incur when customers exceed their available capacity levels.
Until now, there is no penalty charge if a supply exceeds its available capacity beyond the charge the supplier adds for the excess kVA in the month of the breach at the standard available capacity rate. This has meant that end users haven’t been encouraged to review available capacity and improve energy performance.
DCP161 means that from April 2018, users will be charged as much as three times the standard rate if they exceed their peak consumption over half-hourly periods. The rates have not yet been published and will vary by region and voltage. Also introduced by Ofgem from April this year, DCP 228 is a new regulatory change which alters distribution charges depending on usage. This change will lower charges incurred during a red band period and raise charges when energy is used in a green or amber period. This will affect peak charge avoidance strategies.
For supplies that have been or will be converted to half hourly as a result of P272 these will be settled on the HH market by the time DCP161 comes into effect. It is important that the available capacity and maximum demand levels are understood in case these supplies are exceeding the available capacity levels.
DCP161 can be taken as an opportunity to negotiate a new peak capacity with their DNO, and/or take steps to improve energy efficiency and implement devices to limit consumption in a way that should be invisible to building occupants. The options will avoid penalties charges and will also help building owners improve energy performance.
For those who have a supply or capacity contracts due for renewal between now and April 2018, now is the time to negotiate your capacity charges, as excess charges will be based on the supplier you choose. Those who are moving now from the non-HH to HH meters are slightly more vulnerable as they might not know their available capacity. We can give advice to establish the agreed capacity and inform if devices can be installed on site to avoid maximum demand penalties.
If you want help setting your capacity to suit your business or need practical help in setting measures to avoid excess charges, TEAM can help. Contact us on 01908 886127 or email us at firstname.lastname@example.org.