Corporate Energy Procurement

Businesses Face Penalty Charges for Exceeding Assigned Capacity

As of the 1 st of April 2018, Ofgem introduced a new measure known as DCP 161, which affects all businesses on half-hourly (HH) meters.

At this moment, businesses who use more than their available capacity, are only charged for the excess kVa, used at a standard rate. This approach reduces any incentive for high-end users to review higher capacity and in turn, increase their capacity.

Businesses now face penalty charges if their assigned capacity is exceeded. This initiative will assist distribution network operators (DNOs) in recovering additional costs they incur when this occurs.

The penalty charge is likely to be three times the standard rate, which aims to motivate businesses with HH meters to more effectively monitor their usage and in turn, reduce the likelihood of exceeding the prescribed capacity.

It goes without saying that this revised initiative will have a considerable impact on energy costs. The following suggestions are ways to manage these changes:

  • If you have a half-hourly meter, usage will need to be monitored closely to ensure that users do not exceed their prescribed capacity;
  • By amending the times which one is likely to consumer the most electricity, as a means to avoid costly peak-time rates;
  • Optimising available capacity goes a long way in reducing costs, whilst regularly comparing charges against published rates as a means to identify instances of overpayment;
  • Overall, reducing one’s consumption is the most effective way of safeguarding oneself against rising electricity costs.