The new DCP 161 ruling could end in increased excess capacity costs for energy users

Ofgem is introducing a new measure to ensure that half hourly supplies that exceed the assigned available capacity will pay significantly more. DCP 161 is a change to the DCUSA (Distribution Connection and Use of System Agreement) that will introduce Excess Capacity penalties for half hourly electricity supplies. The change is being introduced from 1st April 2018 to recover the additional costs that DNOs (Distribution Network Operators) can incur when customers exceed their available capacity levels.

At present, those who go over their allocated capacity are being charged at the same rate as what they have been contracted for their allocated capacity – meaning there has been no ‘incentive’ for the client to actively pursue with an increase. With DCP 161 this will now result in those who exceed their capacity will be penalised financially, unless they look at increasing it accordingly with the DNO. Luckily increasing capacity is something Orchard Energy's Utility Services department can look into! For more information, please call 0844 581 0844 requesting to speak to our Utility Services Department. Alternatively, existing customers can speak to their energy consultants directly about this. 

DCP 161 means that from April 2018, users will be charged an excess penalty rate which could be over three times higher than the standard rate. The applicable rates have not yet been published and will vary by region and voltage. It is expected that in areas where demand for capacity is high the costs will reflect this. If a supply is regularly exceeding its assigned available capacity, this change could increase the overall electricity costs by up to 1-2% or more depending on the consumption profile.

Ofgem carried out a consultation on this back in 2014, they did originally want this to be implemented as of the 1st April 2016, however, with P272 currently being phased out it would have caused too many issues and not allowed those who would be moving onto the HH market enough time to ‘sort it out’. This was deferred by Ofgem on the 21st October 2015 with a new proposed date of 1st April 2018.

 

 

Sources: Ofgem

https://www.ofgem.gov.uk/publications-and-updates/decision-defer-implementation-dcp161
https://www.ofgem.gov.uk/publications-and-updates/distribution-connection-and-use-system-agreement-dcusa-dcp161-excess-capacity-charges