Excess capacity charges – How going digital can help you prepare

With OFGEM introducing new legislation from April 2018, the excess capacity charge is yet another substantial change which if not managed correctly could lead to penalties which could be more than three times higher than the standard rate.

What is DCP161. For those who aren’t already familiar, DCP161 is a new measure introduced by OFGEM to ensure that Half Hourly (HH) users who exceed their authorised capacity pay significantly more. The mechanism is being introduced from April 2018 and has been put in place to help Distribution Network Operators (DNO’s) recover additional costs that can be incurred when consumers exceed their available capacity. Under current rules, customers who exceed capacity do not incur a penalty and are billed only for the additional consumption – so there is no incentive to actively review and increase in capacity with the DNO. While exact rates have yet to be published, they will vary by region and voltage – which would see the highest penalties coming from areas with larger demand for capacity.

Close monitoring will be key. It is clear that understanding energy usage has never been quite so important. And the need to understand billing on a real-time basis will play an ever more important role. Having access to data of yesterday’s energy usage, available today can help ensure consumers are on track, and stay on track. Utilidex Hub can run smart algorithms across entire energy estates – the Hub will indicate where potential capacity opportunity or error is, then alert users so changes can be made and penalties avoided.

How can we help? With increasing complexity in the way charges are calculated, a more granular approach to validation will also play an important part. Our customers are often multi-site national organisations with large pass through bills, and as accuracy of charges based on geographical locations becomes ever more complex for suppliers, there is a much greater potential for error. We can help with this by providing a highly accurate digital validation process so complex pass-through supplier bills can be validated quickly and easily.

If you would like to find out more about our automated billing and validation services, please contact Richard.lewin@utilidex.com