Businesses with supplies that exceed available capacities will be charged default rates from 2018
Ofgem is introducing a new measure to ensure that half hourly supplies that exceed the assigned available capacity will pay significantly more. DCP 161 is a change to the DCUSA (Distribution Connection and Use of System Agreement) that will introduce Excess Capacity penalties for half hourly electricity supplies. The change is being introduced from 1st April 2018 to recover the additional costs that DNOs (Distribution Network Operators) can incur when customers exceed their available capacity levels.
Currently there is no penalty if a supply exceeds its available capacity beyond the charge the supplier adds for the excess kVA in the month of the breach, which is charged at the standard available capacity rate. The amounts are often minimal giving no incentive for users to review and increase capacity where required.
DCP 161 means that from April 2018, users will be charged an excess penalty rate which could be over three times higher than the standard rate. The applicable rates have not yet been published and will vary by region and voltage. It is expected that in areas where demand for capacity is high the costs will reflect this. If a supply is regularly exceeding its assigned available capacity, this change could increase the overall electricity costs by up to 1-2% or more depending on the consumption profile.
For supplies that have been or will be converted to half hourly as a result of P272 (profile class 05-08 Non half hourly supplies), these will be settled on the half hourly market by the time DCP 161 comes into effect. It is vital that the available capacity and maximum demand levels are understood in case these supplies are exceeding the available capacity levels.
Melanie Kendall-Reid the Compliance Director for energy services provider Carbon2018 commented:
“Any sites that are incurring excess capacity charges need to agree a revised import capacity or take energy saving measures to reduce demand to avoid these charges. Where a supply is not currently exceeding the available capacity level, but may do in the future due to a planned increase in usage, it is vital that a review is undertaken and an increase in available capacity is applied for ahead of the change to avoid incurring significant additional costs. A successful application for additional capacity, particularly in constrained areas, can take many months to complete so action is needed now for at risk supplies to complete this before the 2018 deadline.”
RICS Property Journal, November 2016: