Another increase to your electricity bill
Many electricity users could soon end up with higher bills due to a previously discounted element. Under the new DCP 161 change, the Excess Capacity Charge will jump dramatically in 2018 as Ofgem moves to make it more cost reflective. As a result, electricity distribution companies will be changing how they penalise consumers who use more energy than agreed. Customers should act now rather than sit back and wait for the sharp increase in charges.
Significant cost increases under DCP 161
Currently, the Excess Capacity Charge is set at the same level as standard capacity charges.
In April 2018, when DCP 161 takes effect, the penalty charge will increase – on average – by an estimated 81%. The actual scale of change will vary significantly from region to region, with the last industry estimates indicating an increase of between 49% and 177% for low voltage sites and between 13% and 165% for high voltage consumers.
The unit charge for capacity is relatively small, with the costs for actual consumption generally higher. However, depending on the size of the business, the exposure to costs could still be significant.
Potential impact of increased Excess Capacity Charge
A business which uses around 2GWh per annum and exceeds their agreed capacity or Maximum Import Capacity (MIC) by just 10% could see an average 48% rise in their penalty charges. If the issue is not rectified, this penalty will keep being charged every month, compounding the impact. A larger site, using around 13GWh per year which also uses a similar amount more than agreed would face penalty costs of – on average, nearly £600 per month, while some DNOs will be levying charges for the site in excess of £1,000. However, you can mitigate the effects of DCP161, or even cancel out these costs completely. The first step is to control your usage effectively and make sure to have the correct Maximum Impact Capacity (MIC) agreed with their supplier.
Take control of your energy use
At Utilitywise we’re able to offer a number of related services to help our clients; from Intelligent Building Controls to Long-term Forecast reports, there are a number of ways we can help you reduce and manage your usage and better budget for these future cost increases.
We recommend assessing your capacity levels against your actual usage to see if you’re at risk of rising charges. Our Market Intelligence team can review your electricity capacity to make sure you’re not paying over the odds.
You can find out more about our Capacity Review service here.