Excess capacity charges: are you being overcharged?

Back in April 2018, Ofgem introduced DCP 161, to ensure that any half-hourly (HH) metered sites are billed fairly and correctly in respect of their Agreed Supply Capacity (ASC). Each HH meter across the UK has an ASC, which is measured in kVA and forms part of the site’s Connection Agreement with the local distribution network (DNO).

The ASC is charged at a rate which has been agreed upon within the supply contract and is affected by both voltage level and area. The penalty charge for exceeding your available capacity will increase on average, by an estimated 81%. This charge will vary significantly from region to region.

The purpose behind DCP161’s legislation is to assist the Distribution Network Operators with balancing out network usage. This will help encourage more customers to manage their electricity load more diligently or request that the correct level of capacity is agreed on upfront, at either the time of supply contract negotiations or with the Distribution Network Operator respectively… But, many customers are still not actively managing this because of a lack of understanding or awareness in this area.

As a further note, when looking to review contracted Authorised Supply Capacity it should be noted that if your supply does demand higher than its contracted Available Capacity, not only does it attract Excess Capacity charges, but there are potential liabilities that the DNO could levy with the physical impact of that Excess Capacity on the network infrastructure. To make this clear, if you are exceeding your Authorised Supply Capacity then, you will be overcharged for doing so, as well as putting unnecessary and non-forecasted usage on our National Grid.

In the current climate where local networks are being required to carry increased load requirements, this may become more prominent.

An ASC increase must be a considered decision since the elimination of excess charges does not always outweigh the cost of the higher ASC every month. Also, some increases require site works to be carried out that can be very expensive. 

Electricity meters that have been or are due to be converted to Half Hourly as a result of P272, will be settled on the Half Hourly market. To ensure the ASC is set at the correct level it is essential to understand your site’s requirements and peak Maximum Demand levels. Any sites that are incurring excess capacity charges will need to consider agreeing a revised ASC or take energy-saving measures to reduce their maximum demand.

How can UtilityWorks Help?

Those who are experiencing the move from Non-Half Hourly to Half Hourly metered contracts for the first time are vulnerable as they may not know their available capacity and should seek advice to establish the agreed capacity. 

If you are already operating Half Hourly metering want to review your Authorised Supply Capacity or are looking at ways to reduce your energy consumption and avoid excess charges, UtilityWorks can help:

• Analysis of the existing Agreed Supply Capacity charges utilising Half Hourly data, Power Factor information and your knowledge of the site to establish if an increase or decrease is required.

• Once it has been decided that a change is required we can contact the relevant Distribution Network Operator and request that a new Authorised Supply Capacity is agreed upon. The new figure is then automatically passed to your current supplier who, in turn, ensures that the new figure appears on your electricity invoice.

• We will then monitor your supplier invoices to ensure that any change in the ASC has been correctly applied.

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