P272 Legislation for Business Energy
Find below our comprehensive FAQs - updated June 2016.
P272 is the name given to a new piece of legislation created by Ofgem (the energy regulator) which changes how larger, non-domestic customers are metered and billed. It proposes that Half Hourly (HH) settlement becomes mandatory for all businesses whose electricity meters are in profile classes 05-08, irrespective of their energy supplier.
The legislation aims to make billing and settlement more accurate through the use of each customer’s half hourly (HH) consumption data. The current method of billing using a month end read and non half hourly (NHH) data is not as accurate and masks individual customer behaviour. All meters affected will therefore change from having their energy measured using individual meter reads to HH interval data. This process is commonly referred to as ‘Change of Measurement Class’ (CoMC).
It impacts businesses using electricity meters in industry profile classes 05-08. The profile class 05-08 will then be reclassified to 00 (00 being the profile class for HH supply).
The program starts from the 5th November 2015 and we are obliged to complete the CoMC within 45 working days of supply start (for new business) or contract renewal date. In all cases any meter supplied by Total Gas & Power must complete the CoMC prior to 1st April 2017. Other factors such as the ability for meter agents to accommodate demand will also affect the date the CoMC occurs. We are currently working with our agents to formulate an effective plan for the migration of meters from NHH to HH settlement and will communicate the schedule in due course.
We are currently assessing the financial impact of these changes for customers and will communicate any changes required in due course. However agent and distribution charges will change at the point the meters are moved to HH measurement. The charges vary by geographical location, metering agent and meter type. Please read on for some further information on the changes to the charges.
In most cases meters can be reprogrammed remotely and no site visit will be required. However, we envisage that a small proportion of meters will need to be exchanged – this will be confirmed after a visit or analysis by the Meter Operator.
This will be determined by the type of meter that you have, Current Transformer (CT) or Whole Current (WC). Only those customers with CT meters will become subject to capacity charges and you should expect to be contacted by your Distribution Network Operator to agree the connection capacity for each site affected.
In respect of the period from 5th November 2015, rates have been published which can be found on the websites of the relevant distribution businesses. These rates will be subject to final confirmation 40 days prior to the effective date.
Yes, they will change to the published LLF for half hourly meters.
Not initially. For the period up to 1st April 2017 TNUoS charges will continue to be levied in accordance with their existing NHH charging methodology1 . From 1st April 2017 sites will become subject to the HH (Triad) regime.2
Elexon have stated “...customers impacted by P272 who may then become subject to the CRC scheme would not be impacted until Phase 3 comes into effect, which is scheduled to begin in 2019”. However, you should confirm this with DECC as they administer the scheme rules.
DISTRIBUTION CONNECTION AND USE OF SYSTEM AGREEMENT (DCUSA) DCP248:
Providing protection for customers against being charged inappropriate capacity charges during the implementation of P272
The Balancing and Settlement Code (BSC) modification P272 requires that Profile Class (PC) 5-8 customers become half-hourly (HH) settled subject to suitable installed metering. For associated Distribution Use of System (DUoS) charges, DCUSA modification DCP179 was developed to create new measurement classes for PC 5-8 customers that are migrated to HH settlement.
The relevant DUoS tariff shall be applied to these customers once they have migrated to their new measurement class where capable metering has been installed. Those sites that have a current transformer (CT) meter will migrate to a HH DUoS tariff which has a capacity charge element and will therefore be required to have an agreed Maximum Import Capacity (MIC). Ordinarily, MICs are agreed with the Distribution Network Operator (DNO) at the time of enquiry for a new connection, or requested as a change to the previously agreed capacity and included within a connection agreement.
As a result of P272, over 70,000 customers migrating to HH settlement will need to be assigned a MIC, the majority of which have no MIC or individual connection agreement. DCP248 proposes to allow those customers affected by P272 a grace period of at least 12 months to agree their MIC which would then be applied from the date of change in measurement class. During this grace period, billing would be based on an initial MIC value derived using each DNO’s individual approach.
Under this approach, customers are afforded the opportunity in the 12 months following the change of measurement class to reduce their MIC value and have it applied retrospectively from the date of change of measurement class. After the 12-month grace period, the protection would cease and any further changes to the MIC will be in accordance with existing procedures. This protection is not provided to those customers who have signed a connection agreement in the last 12 months since they have already engaged with their respective DNO and agreed an appropriate MIC value.
These customers will be able to change their MIC on completion of the 12 months (unless their Connection Agreement contains provisions to the contrary) with their revised MIC then reflected in future DUoS charges.
What does this mean to you?
If your meter is Profile Class 5-8, you will have the relevant tariffs pertaining to Distribution Use of System applied. These contain a capacity charge element that is based on your agreed Maximum Import Capacity that will be assigned to you by your Distribution Network Operator (DNO).
You have a period of 12 months from being switched to half hourly settled to reduce your Maximum Import Capacity, should you think it not correct, with your DNO. Total Gas & Power will also monitor all capacity charges and raise any discrepancies with the relevant DNOs. If you have signed a connection agreement with your Distribution Network Operator, this does not apply.
P272 Jargon buster
CoMC : Change of Measurement Class
CT : Current Transformer Meter
DECC : Department of Energy & Climate Change
DUoS : Distribution Use of System
HH : Half Hourly Metering
LLF : Line Loss Factor
NHH : Non Half Hourly Metering
TNUoS : Transmission Network Use of System
WC : Whole Current Meter
3For more information see https://www.gov.uk/crc-energy-efficiency-scheme-qualification-and-regist...
4See P36 of the Final Modification Report https://www.elexon.co.uk/mod-proposal/p272-mandatory-half-hourly-settlem...