A new measure from Ofgem, DCP 161 signals a change to the DCUSA (Distribution Connection and Use of System Agreement). It means that excess capacity charges will be applied if half hourly supplies exceed the capacity assigned. These excess capacity charges are set to increase bills significantly.
What’s the cost?
As of 1st April 2018, the penalty charge will be levied in order to be more cost reflective of the additional charges incurred by DNOs (Distribution Network Operators) when customers go over their agreed capacity levels. At the moment, customers face no penalty other than the cost charged by the supplier for any excess KVA used in a given month where the standard available capacity rate has been breached. This charge is minimal and gives customers no real incentive to look at increasing their overall capacity.
Once DCP 161 is in place, users who are liable for the excess capacity charges may be paying three times the standard rate. This is a significant increase and more likely to encourage customers to review their usage. The rates will vary across regions but exact figures have not been published yet. The cost is likely to be dictated by the level of demand but if supply is regularly being exceeded then customer costs could see increases of 1-2%.
What to do
If your site looks likely to attract the excess capacity charges then now is the time to revise your capacity or investigate the possibility of reducing your energy usage during peak periods.
If you’re ready to take the next step in exploring the potential for your business? Then contact me and we can talk.
Article by: Paul Strachan