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P272: one week in

From 1 April, all businesses in Profile Classes 05 – 08 should have been reclassified as half hourly sites, meaning changes to how their energy is billed and settled and both additional charges and changes to some charging structures.

One week in to the changes, Inenco’s Senior Energy Consultant Chris Berry explains how the new regulation has been implemented and what it means for businesses.

Not every business is equal

The official industry deadline for all suppliers to reclassify impacted businesses was April 1st – so theoretically, all impacted businesses should now have Automatic Meter Reading (AMR) meters and been transferred to the new, half hourly arrangements.

However – not all suppliers have followed the same process. Some businesses found themselves transferred to the new arrangements when their new energy contracts came into force over the last 12 months. Other suppliers waited to April 1st to transfer all their business customers across in one go, to make sure their processes and systems were prepared. Others still are yet to make the change for their business customers.

Some suppliers have offered to honour the non-half hourly rates for those businesses with contracts due to end in September, meaning they effectively have six months’ grace before the new charges come into effect. The only change might be the introduction of a new capacity charge for those organisations with a CT meter.

A minority of businesses are also experiencing some issues with meter exchange: whilst all impacted organisations should have AMR meters fitted to enable non-half hourly settlement, there have been instances of businesses with Whole Current (WC) meters experiencing issues because the meter exchange would interrupt operations while the transfers took place.

If you haven’t yet received information from your supplier about how P272 is impacting you, or if you want to clarify your position or help deciphering new invoice formats, or if you need support arranging a meter exchange, get in touch – Inenco can help you to understand and prepare for the changes to your business’ energy invoices.

Half hourly settlement: what does it mean in practice?

As a reminder, if your business is impacted by P272, the following key changes will be made to your energy invoices:

  1. New charging structures

Half hourly settlement means exposure to new charges. Time of use will become critical, as energy consumed during peak demand periods means distribution and transmission network charges will be higher. This winter, the new Capacity Market comes into force, with a new levy applied to business bills depending on how much energy is consumed between 4pm and 7pm, Monday to Friday, from November to February. This will apply to all half hourly settled businesses, so finding out your exposure and how to mitigate this is crucial.

  1. New charges on the bill

The new P272 arrangements also means that many organisations will face data collection and meter operator charges for the first time. Businesses will have been placed on default metering contracts by suppliers, but shopping around for these contracts can make a big difference: Inenco estimates that businesses could save up to £600 per meter point each year: for some organisations with multiple sites, that quickly adds up to big savings.

Businesses with CT meters will also have to pay a new capacity charge, based on how much energy they take from the Grid. Inenco can help you to understand this, so do get in touch.

  1. Half hourly billing

Half hourly billing means half hourly data – a far more granular level than your organisation may have previously been used to receiving. This rich data can help inform energy management strategies and identify opportunities to make significant savings by getting a far more informed view of your energy usage, offsetting any additional costs that the P272 change could mean for your business.

  1. New opportunities

If your business is able to adjust its energy consumption to avoid the higher network charges during peak demand periods (for example, by turning down equipment or shifting processes outside of the costlier time zones), you may also be able to benefit from demand side response opportunities, earning revenue from this flexibility. There are a variety of National Grid schemes that businesses can participate in to be paid for providing a vital service for helping to balance the energy system during times of peak demand – it could pay to explore whether this suits your business.

For help understanding P272 or trouble shooting any of the new charges or changes to your energy account, get in touch with one of energy experts today. Call us on 08451 46 36 26 or email enquiries@inenco.com.