Excess Capacity Charges are about to get Extremely Expensive…
Excess capacity charges are applied to customers who use more than their Agreed Supply Capacity, ASC. i.e. if you use more than your Agreed Supply Capacity in a given month, you will see an Excess Capacity Charge on your bill to cover this overage.
Currently Excess Capacity Charges are applied at the same level as Agreed Supply Capacity, i.e. no financial incentive to increase the ASC to cover the overage amount. Excess Capacity Charges apply for the month when the breach occurred. However, as of 01-Apr-18 these charges will become much more expensive, possibly three times the cost of regular capacity! This new arrangement is designed to encourage client’s to review their ASC and ensure that it is in line with their current and anticipated requirements.
Ofgem’s DCP 161 measure will send a loud and clear message that electricity customers need to pay attention to their capacity requirements, establish an ASC at an appropriate level or pay the consequences, i.e. be charged penalty rates for any breach of ASC. The penalty rates are yet to be set, but there is talk of them being has high as three times the regular ASC charge.
What action do you need to take?
If you have a Half Hourly Meter, i.e. your MPAN number starts 00, you need to pay attention. This includes all the recent converts to Half Hourly Metering: those former 05, 06, 07 and 08 MPANS which will undergo a mandatory upgrade to Half Hourly metering by 31/03/17. For more information on this upgrade and P272, see our other page here.
So you confirmed you are Half Hourly Metered, what next?
Check your bills for excess capacity charges, this is the warning flag that you are breaching your ASC and if you continue this trend in 2018 you will be subject to penalty rates. Don’t panic, if Excess Capacity Charges appear on your bill get in touch with Direct Power straight away. We will review your ASC and work with you and your Distribution Company to request and set up a new ASC, one more reflective of your needs and will enable you to avoid the penalty ASC charges. Simultaneously we can help you come up with a plan to improve your energy efficiency and negate the need to increase your ASC, after all, there are so many benefits to enjoy by reducing your energy consumption.
Do not delay…
As this measure is going to impact thousands of clients all at the same time, it is better to be proactive than reactive. One can expect a flood of ASC Capacity Increase requests as we close in on 01-Apr-18. We want to help you get ahead of the curve. There is only a finite amount of ASC in any given location, so get organised, get your new ASC approved with the help of Direct Power and sleep easy knowing you will avoid penalty Excessive Capacity Charges. If you delay your request, there may be insufficient capacity in your neighbourhood to meet your requirements, and you could face a large cost to reinforce the network to meet your demand.
So don’t wait until 2018 to address this issue, it need not take up much of your time. All you have to do is CONTACT Direct Power if you see excess capacity charges on your bill and we will take care of the rest!