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Need to Know: P272 Maximum Demand Meter Changes - Will your business be affected?

The Maximum Demand Meter Changes or P272 legislation was approved by Ofgem in October 2014 and will affect those businesses with a 05-08 profile Maximum Demand meter.

If you are not sure of your meter profile just take a look at your MPAN number, located on your electricity bill, and see whether the number circled below is 05,06,07 or 08.

If it is 05,06, 07 or 08, your business has a Maximum Demand Meter and your billing process will be changing.

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Why is this happening?

The legislation was passed in an attempt to make billing more accurate, allowing suppliers to better monitor businesses with high energy usage.

In April 2014, most large non-domestic electricity consumers were issued with Automated Meter Reading (AMR) meters which have the ability to record Half-Hourly (HH) consumption. Ofgem believe that by measuring the HH usage data, costs will then be more accurately reconciled between consumers and suppliers, and suppliers and generators.

It is estimated that this change will affect 160,000 05-08 meters across the UK, requiring that they are settled half-hourly by 1st April 2017. The changes do not affect quarterly billed customers with Profile Classes 01, 02 (domestic) or 03 and 04 (small businesses).

Despite the fact that you pay suppliers for your electricity, it is actually delivered, via the supplier, to your area by the Distributor Network Operator (DNO). The data that will be gathered, as a result of the changes, will better inform the DNO of how much energy needs to be supplied to a particular area, also helping suppliers to purchase electricity from the grid more effectively.

It is hoped that a better understanding of energy usage, will result in customers being given the opportunity to reduce their overall electricity costs by moving to lower cost periods, or using energy more effectively during times when energy consumption in the area is not as high.

What does this mean for my business?

If your business does use a 05-08 meter currently, you will be subjected to increased charges when you are migrated to a half-hourly supply. Some of this additional cost is due to the requirement that all HH meters have a Meter Operator Agreement (MOP) and a Data Collector (DC) for each supply, the cost of which tends to be rolled into your final bill.

Another charge comes as a result of a monthly capacity charge for the kVa level allocated to the supply. This is determined by the area distributor measuring the Maximum Import Capacity (MIC) of your property and working out your peak energy usage. The charge is the result of you having to pay for the availability of your peak usage, regardless of when it is due to occur.

Despite the additional costs, there are benefits. HH meters do enable better energy management, providing a clearer picture of energy consumption. By having full visibility and by knowing when your peak usage occurs, you are in a better position to control your consumption and potentially reduce your bill as a result. 

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When will these changes occur?

When migration occurs will largely depend on your supplier but the deadline for implementation, set by Ofgem, is 1st April 2017. Many suppliers are seeking to make the changes sooner rather than later to avoid mid-term changes to contracts. Most suppliers will honour the MD prices secured in existing contracts until renewal is due. However, when the renewal date arrives you should be made aware of the changes that will occur and what tariff options are available to you.

This is where Love Energy Savings can provide invaluable help.

Our experienced energy consultants will be on hand every step of the way, if you decide to switch with us. With years of experience helping businesses just like yours, market-leading prices and fantastic supplier relationships, we can help you secure the fairest deal on your business energy, despite the changes.

For more information on the changes, and to find out the lowest-priced tariffs for your business, please contact us on 0800 9888375 and one of our experienced energy consultants will be happy to help you.