P272 Legislation – Your Business’ P272 Guide

What’s on this page?

1. How will the bill and billing change?
2. Why what P272 legislation implemented?
3. Does P272 legislation affect your business?
4. How do I know the profile class of my business?
5. What are the business benefits?
6. Will my meter need to be changed?
7. Want to find out more about P272 legislation?

What is P272 legislation?

P272 is the industry name of the mandatory regulatory change for electricity meters in classes 05-08 (often called Max Demand Meters) that affects over 100,000 UK businesses.

P272 legislation has now been in place for over year. Implemented in April 2017, P272 is regarded as one of the most significant changes in the business energy market since deregulation.

Essentially, P272 is regulation for energy suppliers to use more detailed and accurate energy information about their customers’ consumption. Since April 2017, P272 legislation requires that all businesses in profile classes 5 to 8 have their energy use recorded every half hour, part of a process known as ‘settlement’. This mandatory regulation affects the way all electricity suppliers settle electricity consumption for businesses.

By licence, energy suppliers are required to take all reasonable steps to install half-hourly meters (HH) at the premises of customers in profile classes 5-8.

To quote OFGEM, the industry regulator: “The electricity settlement process set out in the Balancing and Settlement Code (BSC) places incentives on suppliers to buy energy to meet their customers’ demand”  and  “Suppliers have a licence obligation to supply larger non-domestic customers in Profile Classes 5-8 through an advanced meter that can record half-hourly consumption. BSC Modification Proposal 272 would require that these consumers are settled using their half-hourly data.”.

How will the bill and billing change?

Currently, your supplier bills you based on a single read giving your supplier your annual consumption which is then subject to an industry-agreed calculation based on your meter class. This then gives your supplier a crude picture of when they think you actually use electricity. Your electricity bill is very simple but not reflective of when you really consume electricity.

Going forward, an 05-08 meter will be automatically read every half hour, over the full year, giving your supplier your actual consumption from 17,520 reads. As such your bill will become more accurate but also a lot more complicated and new charges may also appear.

It is also possible that you could be charged more if you use electricity during peak times. The situation is complicated as energy suppliers are approaching the changeover in different ways and the peak times vary depending upon the Distribution Network provider you are linked to.

Why what P272 legislation implemented?

The revised Balancing and Settlement Code (BSC) Modifications mean that energy suppliers and generators have more accurate energy consumption data on which to base the settlement process.

During a settlement, suppliers and generators trade with each other to meet energy consumers’ need. For every half-hour period, they will compare:

• How much energy suppliers have bought
• The amount of energy consumers have used
• Then calculate the charges a supplier must pay to make up the difference

Before the new P272 legislation, the energy suppliers and generators would rely on estimated to work out customers’ energy consumption. With the installation of half-hourly meters, however, this data is accessible at their fingertips.

Does P272 legislation affect your business?

P272 applies to all businesses in profile classes 5-8. According to OFGEM’s P272 site, the legislation affects approximately 160,000 medium energy usage organisations in Britain.

How do I know the profile class of my business?

Take a look at the Meter Point Administration Number/Supply Number on your electricity bill – this is a legal requirement and you will find it on your bill, regardless of the supplier you use.

• If the first number in the box to the right of the ‘S’ is 05, 06, 07 or 08, then your business is affected by the changes.
• If the number is 01, 02, 03, 04 or 00, P272 does not affect your business.

What are the business benefits?

There are real potential benefits from using this improved energy consumption data stream to manage consumption and reduce costs. An example would be changing the schedule by which energy is consumed; heating and air-conditioning, machinery power and other uses can be rescheduled to avoid high costs.

Having access to half-hourly energy data will help your business manage and use energy more efficiently. With more understanding and insights into your electricity use, your business will have accurate information on which to base your energy management decisions.

• Get a more accurate energy bill, based on actual data instead of estimates
• Identify and maximise energy efficiencies
• Manage your energy consumption
• Reduce energy costs
• Suppliers have the opportunity to offer more bespoke deals tailored to your business’ individual energy use

Will my meter need to be changed?

The majority of 05-08 meters are most likely to be an AMR meter, or in the process of being converted to one, as a result of previous industry regulatory requirements. This means that, in the majority of cases, the meter won’t need any change to be configured for Half Hourly billing. In the rare occurrences where the AMR meter is not configured for HH reads, the supplier should be able to modify this remotely without any change to the meter.

Want to find out more about P272 legislation?

• Visit the OFGEM website
• Contact a Smarter Business energy broker for expert advice about the impact of P272 legislation on your business.

The opportunity

We’ll help you understand the impact of P272 on your business and our services can help put you back in control. Our P272 Solution gives you:

• Dedicated P272 experts who will assess your current situation, de-mystify the change, help you manage the transition and ensure your new bill is correct
• Help to understand and take advantage of the opportunities P272 has created
• The software and tools to visualise your electricity use through Monitoring and Targeting
• The ability to control how and when you use your electricity to be more efficient, reduce consumption at peak times, lower your costs and find the most suitable deal in the future
• If required, a highly experienced Data Collector (DC) and Meter Operator (MOP), at a potentially lower cost than your suppliers’ choice, who will ensure that we receive the accurate and timely electricity data we need to help you monitor your usage

The alternative:

• You hand control of your consumption data to your supplier
• You won’t know what your supplier is basing your bill on
• You won’t know if your new bill is correct or not
• You won’t have quick access to your own electricity data
• You won’t know how to make savings and take control