Changes to excess capacity charges for Half-Hourly Electricity Customers from April 2018

DCP161 – Penalties for exceeding agreed capacity

Ofgem have agreed changes to the Distribution Code that mean that Half-Hourly customers who regularly exceed their agreed maximum capacity will be penalised through new excess capacity charges.  This change will enable the additional costs to be recovered by the Distribution Network Operators (DNOs) that can incur when customers exceed their agreed capacity levels.

At the moment there is no penalty for exceeding level of maximum capacity agreed between the customer and DNO.  The customer will pay additional kVA charges but this does not act as an incentive for consumers to regularly review and revise their maximum capacity consumption.

From April 2018, businesses that regularly exceed their maximum capacity may face charges penalty charges of up to three times the rate that they pay for their agreed capacity which could mean significant additional expenditure.

Half-Hourly consumers who wish to avoid these new penalty charges should review whether they regularly exceed their agreed capacity and if so implement energy efficiency improvements to reduce their maximum demand or contact their Distribution Network Operator to agree a revised maximum capacity level.