Suppliers, generators and National Grid can be sure how much and what time electricity will be consumed for only a very small number of customers. More importantly they are unable to predict with any amount of accuracy, how much electricity their customers as a whole will use in any given period.
This leads to imbalances between the amount of electricity made available to a supplier and the amount consumed. Where there is an excess suppliers have to pay for it anyway and where there is a theoretical shortfall suppliers have to buy it retrospectively – usually at punitive rates.
A recent regulation change by Ofgem (the energy market regulators) means that a larger proportion of electricity will be monitored on a ‘half hourly’ basis. For suppliers this means that they will be required to gather half hourly data on all meter profiles between 05 and 08.
The aim is to reduce the amount of guesswork that is required in the balancing and settlement of the electricity market. The potential savings are significant for the industry and ultimately for the consumer. Long term, Ofgem would like all commercial supplies to be monitored half hourly but it is starting with the 05-08 profiled meters. It is estimated that there are between 150 and 170,000 affected meters in the UK and if yours is one of them there are some things you need to know.
How could this affect your business?
If you have profile class 05-08 meters the meter will need to go through a ‘change of measurement class’ (CoMC) to Half Hourly Settlement. This affects the type of supply contracts that are available to you and the mechanism through which you tender your supply contracts.
How do I know if I have Profile Class 05-08 meters installed?
To find out if your meters are Profile Class 05-08 you can check your bill or call Power Direct and we will be able to advise you. The profile class is the first two numbers of meter point administration number or MPAN.
When will P272 affect me?
The implementation of P272 has been set to allow for a phased migration with a start date of 5th November 2015. Any profile class 05-08 supply contracts due for renewal after this date must be migrated to HH Settlement within 45 days of the contract renewal date. The latest date for the migration to half hourly settlement is the 1st April 2017. This means that for some business sites implementation will be earlier and for others it will be later, depending on the supply contract renewal date.
What do I need to do?
If your meter is affected, you will need to appoint a Meter Operator (Mop) and Data Collector (DC) to maintain the meter and process the consumption data. Familiarising yourself with the reasons behind the change will go a long way in gaining the benefits, so make sure you understand how it will affect you. Talking to your supplier, MOP or DC can help in this.
Do I need a new meter?
The majority of customers who are affected won’t need to have a new meter installed. Generally speaking your meter will be configured for the change remotely, some Meter Operators prefer to install their own meter but this will be explained to you when you contract for your half hourly supply.
Will P272 affect my bills?
Unfortunately, moving to HH Settlement means new charges will appear on your bill and could involve unavoidable cost increases. The capacity that is available at your site will be charged separately where it may not have done and whilst the standing charges would previously have covered the transmission, distribution and balancing costs you may find that these are itemised and have increased.
However, some may see a decrease in their bills, depending on patterns of usage. If your usage is off-peak then you may find that you end up paying a much reduced rate for your actual energy charges that more than off-sets any other charges that are applied.
What happens if I don’t do anything?
If you do not appoint a preferred Data Collector (DC), to manage the process your supplier will be obliged to take control and appoint their default providers. This would mean that you do not benefit from shopping around for the service. Equally you should also ensure that the kVA (capacity) charges are appropriate for your needs so that you are not being over charged.
Suppliers are offering contracts for the initial period based on your current profile class but you need to be clear that the half hourly contract that follows on from that is optimised for price taking all of your costs into consideration.
There is a lot to think about if you are contracting for one of these meters at the moment and needless to say Power Direct Ltd is happy to help.
Call 01452 886406 today for more information on the New Ofgem Regulation P272