Guidance to help businesses avoid new charges

Businesses face the prospect of paying significantly more for energy that exceeds their assigned capacity, following new measures to be introduced by Ofgem next year.

The government regulator’s DCP 161 measure is a change to the Distribution Connection and Use of System Agreement (DCUSA) and will introduce severe Excess Capacity Penalties for businesses that over-use their half-hour energy supplies.

The changes come into effect from April 2018, and are intended as a means of recuperating costs incurred by Distribution Network Operators (DNOs) when customers exceed their available capacity levels.

The changes represent a significant shift from current rules.

At the moment, any business that exceeds its allocated capacity is charged for usage at the usual rate, but those who do not increase their capacities in accordance with the new measures next April could face hefty financial penalties.

The excess penalty rate will be as much as three times the standard rate and costs will be higher in areas where demand for capacity is high.

Lucia Harney-Dey, associate director at Orchard Energy, said: “It is crucial that businesses and organisations understand the implications of Ofgem’s new measures, as there is a risk of severe financial penalties to those who don’t adapt.

“Orchard Energy can help businesses apply to change their assigned energy capacity before the measures come into effect, provide information about what the measures mean in practice for them and offer guidance through the process.

“The Energy Grid will be working to balance the network in the months ahead and we are advising businesses to move quickly to avoid issues further down the line.”