What is DCP161?
DCP161 was introduced by industry regulator Ofgem to ensure Half Hourly supplies which have gone beyond their assigned available capacity will be charged a serious amount more than currently.
This is a change to the DCUSA (Distribution Connection and Use of System) which will initiate excess capacity penalties for half hourly electricity supplies. The change has been implemented to ensure that additional costs that DNOs (Distribution network operators) can incur when customers exceed their available capacity levels are recovered.
What was the situation to date?
Prior to the introduction of DCP 161, if you exceeded your available capacity, you would face two possible outcomes.
The first outcome which would be executed by your supplier is that your supplier would pass on additional charges at either an increased rate or the same rate. The second outcome would apply to you if you exceeded your capacity 3 times over the scope of 12 months, you could be forced into a capacity increase. However, if the capacity isn’t available then focus shifts to your site, where work could need to be done at the expense of yourself, not the DNO.
Consequently, the only the charges that you could incur is an additional charge for the excess kVA. If you aren’t aware of what KVA charges are then please refer to our blog post on the topic.
How much will I get charged?
The introduction of the new legislation means that users who do exceed their capacity will be charged an excess penalty rate – an average of 73% higher than your available capacity charge. However, applicable rates will vary based on your businesses region and voltage, with that being noted costs are expected to be elevated in regions where demand for capacity is higher
How can I avoid being charged?
Start off by making sure you fully understand your current available capacity and maximum demand level of your supplies. Ideally, you need to review your capacity throughout your entire business, making sure that you are fully aware of any sites which could exceed your capacity allowance and incur excess capacity charges. Make sure your capacity allowance reflects your required capacity and review and update this annually.
However, meters that are still due to be updated to half hourly because of P272 should know that they could be vulnerable, as in most cases, they won’t know of their required capacity.
This can cause concern as you risk setting your available capacity either too low and incur those excess charges. On the other hand, you may set your available capacity too high, meaning you’re paying for more capacity than you need.
Businesses who are currently transitioning to half hourly meters should seek advice to establish their required capacity. After a few months of data, you should have enough to be able to set your correct capacity based on previous monthly maximum demands.
For those who believe these changes will impact their business in any way or who just want to ensure their due diligence, please do get in touch. At eyebright, we can help establish your current demand and current maximum demand to ensure your business has enough capacity and aren’t paying for the capacity that you don’t require.
For further information on DCP 161 or any of the other topics mentioned in this blog post, please do not hesitate to get in touch.