From April 2018, the new regulatory change from OFGEM, DCP 228 will alter the way in which electricity distribution charges are calculated. This will affect the way business properties are billed. Distribution charges currently account for up to 19% of your bill. As a result, you may look to re-examine the times at which you use energy in order to reduce costs.
The main distribution charge is DUoS (Distribution Use of System) which correlates to usage and is calculated using a Red, Amber and Green banding system. The aim of DCP 228 is to revise how DUoS charges are calculated, so they accurately reflect the costs incurred by network operators during peak and non-peak periods.
The change will also affect Common Distribution Charging Methodology (CDCM) and how customer tariffs are set. Under the existing CDCM structure, energy consumed during DUoS Red Band (peak) periods is priced much higher than during either Amber or Green (non-peak) periods. However, the new change will mean that charges during Red Band periods will be lowered and raised during Amber and Green. This will essentially flatten the charging structure, creating more of a balance across the bands.
How will your business be affected?
All businesses will be affected by DCP 228, excluding the UK’s larger electricity connectors whose charges are governed by the Extra High Voltage Distribution Charging Methodology (EHVDCM).
For many half-hourly businesses, DCP 228 will mean a rise in energy costs. However those with a high use at peak times may see a small decrease on their bills. The level of impact will be based on your region and DNO (Distribution Network Operator).
What can I do?
Monitoring when your business is using the most energy is the first step to reducing consumption when tariff rates are at their highest. How can you monitor this? STC can help you identify ways to reduce energy costs and mitigate the impact of DCP 228 on your business. Our Profile Alerts are a successful way to analyse your electricity usage, helping you to reduce consumption and save on costs, whilst also combating energy waste.
Find out more about our monitoring and targeting services here.
Get in touch
www.inspiredenergy.co.uk (STC Energy are part of the Inspired Energy Group)
T: 0208 466 2900
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