DCP161 is quite simply a new mechanism for DNO’s (Distribution Network Operators) to charge half-hourly metered customers a financial penalty when half-hourly metered sites exceed their agreed capacity.
Following on from our recent article on DCP228 (Changes to DUoS Charges), From 1st April 2018, DCP161 will also be in force.
Ofgem have introduced this new measure to ensure that half hourly supplies that exceed the pre-agreed available capacity will pay significantly more for any additional capacity.
DCP161 is a change to the DCUSA (Distribution Connection and Use of System Agreement) that will introduce Excess Capacity penalties for HH (Half Hourly) electricity supplies.
Currently, there is no financial penalty if a supply exceeds its available capacity with many suppliers simply charging the same agreed cost for any excess, without even adding a process cost.
The introduction of DCP161 now means that from 2018 HH (Half Hourly) electricity users will be charged an excess penalty rate which could be up to four times higher than the standard agreed rate. This change could increase the overall electricity costs by up to 1-2% or more depending on the type of consumption profile.
But only where additional excess capacity is available, as we would expect that in areas where demand for capacity is high, customers may also have to pay for network reinforcement to make the additional capacity available.
Network reinforcement is an upgrade to the local distribution network and in extreme cases cost can run into the hundreds of thousands.
For customers who are not already exceeding the available capacity level, this change will have no impact on them unless there is any planned increase in usage. If this is the case, then it is vital that a review is undertaken now to understand the load requirements, and an increase to the available capacity applied for to avoid incurring any significant additional costs.
For those supplies that have recently converted to a HH supply through the P272 Process (previous profile class 05-08 NHH supplies) will also be subject to these applied changes. So, it is now vital that the onsite available capacity and maximum demand levels are clearly understood in case the pre-set levels are not adequate and are already exceeding the available capacity levels.
Its vitally important that any HH sites that our currently incurring excess capacity charges need to review their current and future business strategy. With a view of either agreeing a revised import capacity to cover any future business plans, or start to take energy saving measures now to reduce demand at peak times to avoid these charges.
If you would like any assistance with this or require further clarification on your individual requirements, please feel free to contact a member of our energy services team.