What is DCP161?

The Distribution Change Proposal 161 (DCP161) is a change to the Distribution Connection and Use of System Agreement (DCUSA). The new regulation allocates the total electricity capacity and usage for certain sites. Should a site use more than their Agreed Supply Capacity (ASC), then they would face “Excess Capacity Charges”. Unlike before, they’re no longer privy to “special discounts” applied under such circumstances.

How does it work?

Each half-hourly (HH) metred site across the UK has an ASC. These are measured in kVA and form part of the sites Connection Agreement with the local Distribution Network Operators (DNO). This ASC is charged at a rate sited in your specific Connection Agreement. It is affected by both region and voltage. The penalty charge for exceeding your ASC will increase – on average – by an estimated 73%.

Who was behind the Excess Capacity Charge?

The change was introduced by the UK government’s regulator for gas and electricity markets – widely known as Ofgem (the Office of Gas and Electricity Markets). The new measure was supposed to go into effect from April 2016. However, Western Power Distribution requested it be delayed until April 2018. Ofgem honoured this and the measure was deferred until April 2018. However, as of writing, it is now in full effect. Ofgem was transparent about the situation and outlined everything here.

Why was the DCP161 introduced?

To put it simply, the measure was introduced to recover additional costs that DNOs faced. This was due to the regularity of customers exceeding their contracts energy allowance. Now able to charge Excess Capacity penalties for Half Hourly (HH) electricity supplies, DNOs aim to offset their costs.

Did you have the capacity to change?

As of writing, the regulation has been in effect for 3 years.

The change affected all HH metered premises who exceeded their agreed consumption capacity. Some businesses have claimed they’ve been charged up to three times the standard rate. All for exceeding their peak consumption over half-hourly periods. This, of course, varies between region and voltage. Still, it’s nonetheless an astonishing figure.

When examining the renegotiation of your energy supply, always approach with caution. For example, if your site uses higher than its contracted ASC, it can raise a number of problems. You not only face Excess Capacity penalties, but you could impact the network infrastructure. In such a situation, DNO could levy further penalties to force you to renegotiate your capacity charges.

What next?

Always keep on top of your energy consumption. After all, it’s easier to negotiate capacity charges when you’re within your limits. It’s less so when you’re not and you’re being asked to reach into your pocket!

Fortunately, Power Audit UK are on hand to help. Our goal is to assess whether your company is as energised as it could be. We’ll determine your energy usage and can set practical measures to ensure you avoid excess charges. You’d be surprised at how much your usage can fluctuate. We can help you settle on a capacity that’s good for you and your business.

 However, if you decide to go it alone, we must stress that any revisions to your ASC must be an informed decision. Despite jettisoning excess charges, such an increase might not always favour your business. It might not even outweigh the cost of heightened ASC. Before negotiating such increases, ensure you’re familiar with your site’s requirements – such as its peak maximum demand levels. Otherwise, your site might require some work to be carried out – such as energy-saving measures – which in itself can prove quite costly.

How we can help

We’ll analyse your existing Agreed Supply Capacity (ASC) charge.

We’ll utilise HH data and your own knowledge of your designated site to establish if an increase or decrease in ASC is required.

From here, we can contact DNO and request a new Connection Agreement.
This would be subject to your decision but once accepted by DNO, the new figure will be passed to your current supplier.

We’re on hand to monitor the situation.
Once your supplier amends your invoice with the new figure, we’ll keep an eye on things to ensure any changes to the ASC are correctly applied, every time.

Concerned about your energy?

 

What: Power Audit UK
Who: Sean Taylor

With over 23 years of experience, Sean’s knowledge as a UK-based commercial energy broker is next-to-none. If you’d like to benefit from a full energy audit or any of Our Services, simply reach out and get in touch below! Sean’s worked across all sectors of business, including charities, schools and universities.

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