New business electricity metering laws come into force

Do you have a business? Are you aware of P272?

The energy industry is getting ready for a major change in the way some meter profile classes are going to be billed, with the change taking effect in April 2017. Yet, a recent survey commissioned by Npower claims that 81% of British retailers are unaware of upcoming legislation P272.

In brief, the regulation will mean changes to how energy is measured and billed for businesses across the UK. With medium users of electrical energy being obliged to update their metering systems to the same systems which are commonly used for larger electricity users.

What is P272?

In the name of upgrading the electricity market, P272 is the name of a piece of OFGEM regulation. P272 requires that all maximum demand meters (Profile class 05-08) who have an AMR (Automatic Meter Reading) meter fitted will need to be settled on actual Half Hourly (HH) consumption data in the same way that Half Hourly meters (profile 00) are currently settled. Currently settlement occurs using an industry wide forecast that is pre-determined in order to allocate electricity volumes to each supplier.

When will this happen?

Originally proposed in 2011 and after several modifications, P272 was approved by OFGEM in Oct 2014 stating that the deadline for the switchover to HH settlement is on April 1st 2017.

How will this affect you?

Any business with metering profiles of 05, 06, 07 or 08 will be affected. Many suppliers have already begun offering new quotes for all concerned customers who are HH settled. If you are unsure of what your meter number is then you can find this on your meter. If the number starts with 05, 06, 07 or 08 then P272 effects your business.

What will change?

Users who are currently settled by profiles already have meter installation, maintenance and reading costs included in their bills meaning they don't require addition meter charges or side contracts. The P272 will see the introduction of new contractual costs.

How will it benefit you?

Metering data in Half-Hourly intervals ensures your electricity bills will be more representative of your site's actual power consumption, meaning you will be able to more accurately match your tariffs to your actual usage. The enhanced accuracy of the data allows for the more efficient and flexible management of energy. Using HH data, the more advanced suppliers with the ability to forecast demand will be in a better position to reduce supply costs and overall operational costs.

What does this mean for my energy costs?

The processes around P272 will mean energy usage is measured based on half-hourly readings, this will allow suppliers to price contracts based on actual consumption patterns and will therefore provide businesses with an invoice that better reflects the actual cost of their energy. This is good news, as it means electricity rates should be much more representative of market rates. If you use lots of energy in low demand periods then your rates will reflect this. Of course if you have a heavy on-peak use profile the opposite will be true.

How do I comply?

If you are in the affected groups you will need to appoint a Meter Operator (MOP) before April 1st 2016 and Data Collector (DC) to maintain and run your meters - this means, those effected, need to arrange their initial half-hourly data collection and meter operator contracts. However, the energy supplier will do all the work to switch the meter over to half hourly readings