How Do I Know if I am a Large Energy User?
A modification to the Balancing and Settlement Code issued by OFGEM in October 2014, called P272, changed the way that meters are charged. Previously only applying to energy intensive businesses with 00 meters, the scope of what constitutes a large energy user has now expanded.
On the 1st April 2017, all businesses with an electricity meter with profile type 05-08, also known as a Maximum Demand meter, will be required to receive half-hourly (HH) billing. If you haven’t signed up to a new contract since 5th November 2015 and switched to HH billing then, come the 1st April 2017, you will be required to do so.
It’s estimated that over 160,000 meters will be affected across the UK. For more information on P272 you can read our comprehensive guide here.
How do I know if I am affected?
It is simple to find out if your business is now classed as a large user. On your electricity bill, there should be a record of your Supply Number, also known as your Meter Point Administration Number or MPAN.
If, in the top left hand corner, there are the digits 05, 06, 07 or 08, you are on a Maximum Demand meter and are now classed as a large user to be billed half-hourly. 00 corresponds to those users who are already on a HH meter.
If the digits are 03 or 04, you’re not affected.
Why am I now classed as a large user?
You may think that your energy comes solely from your supplier, but this is not the case. Electricity is sent to your supplier by the Distribution Network Operator (DNO) for your energy region. Before the market was de-regulated in 1998, the DNO was also your energy supplier, you didn’t have a choice, your supplier was dictated by your postcode.
Once the market was de-regulated, and consumers were free to choose, DNO’s had to supply enough energy to the various energy companies servicing that region. Suppliers therefore now must estimate how much energy they will require in advance, allowing them to supply their customers at the price promised.
The problem with larger users is that they obviously use a lot more energy than the standard home, therefore, to ensure that the correct amount of energy is available, it is more pragmatic for those premises to be better monitored.
HH billing requires an Automated Meter Reading (AMR) meter to supply usage data direct to the supplier every 30 minutes. This not only helps the supplier to more accurately estimate the amount of electricity required, it also ensures the consumer gets a more precise bill.
With supply margins narrow, it is important for usage levels to be increasingly specific in order to keep the lights on.
Contrary to popular belief, it’s not simply a way for suppliers to make more money, but a way to make sure there is enough electricity to go around, at an acceptable price.
How will being classed as a large user affect my energy bills?
By being billed half-hourly, there is the potential for your bills to rise. Not because energy prices have increased, but due to the man power needed to monitor your usage; the costs will be added to your final bill.
It is your suppliers job to provide all HH customers with a Meter Operator (MO) who is responsible for the installation and maintenance of your meter; a Data Collector (DC) responsible for collecting meter readings; and a Data Aggregator (DA), who should keep an eye on your consumption, ensuring it meets the necessary requirements.
However, an increase in your bill may not be the case for everyone. As mentioned before, HH billing allows for more accurate consumption data. For those who have previously received estimated bills from their supplier, potentially over estimating usage, those customers may actually see a cost reduction.
The most surefire way to ensure your electricity costs are as low as possible is by working with a reputable third party intermediary (TPI) like Love Energy, who will be able to liaise with a range of energy suppliers on your behalf, securing you a cheaper deal.
Due to our standing in the industry and favourable relationships with a range of energy companies, we have the negotiating power to secure a cheaper price than you’ll be offered when your contract comes up for renewal.
What should I do if I’m still unsure?
If you are still unsure as to whether you are classed as a large user, simply call our energy experts now. With your permission, in the form of a Letter of Authority (LoA), we will be able to speak with suppliers on your behalf to check out your current position.
An LoA will only ever allow us to collect information for you, we will never enter a contract on your behalf and you are free to walk away at any time.
You can find out more about an LoA and find an example here.
Our main and only aim is to save you time and money when it comes to your commercial energy. We’re committed to promoting transparency in the energy sector and we’re campaigning on behalf of businesses large and small to make sure they are being treated fairly by suppliers and TPI’s alike.
You can read our whitepaper here.
For further information or to request a market comparison please contact our specialist large energy user team today on 01204 866241 and find out how much you could be saving.