Inenco chief commercial officer Dave Cockshott explains what you need to know about the new half-hourly settlement code in this sponsored post.
P272: mandatory half hourly settlement for profile classes 05-08. ‘It sounds like a fairly innocuous change to some industry code, and unlike an obligation on end users such as ESOS, it’s probably something that you don’t need to worry about.’ Does that sound like your reaction to the latest piece of regulation? A quick poll of energy professionals showed many are unaware of this impending change, yet P272 will impact some 160,000 business sites, increasing metering costs and impacting the way medium energy users are charged for the electricity they consume. For some businesses, half hourly settlement will be introduced as early as November this year.
P272 – what is it?
P272 changes how business energy usage is metered and billed. Originally scheduled for April 2016, the implementation date has been brought forward for some business sites under amendment P322 and delayed for others to gradually phase in the change of measurement class. It impacts businesses using electricity meters in industry profile classes 05-08. Under P272, all affected sites must use accredited, automated meters that can send regular half hourly usage data to energy suppliers so that they can calculate and bill them accordingly.
Currently, these sites are not settled half hourly, regardless of whether they have an AMR. Instead they are settled against an average profile shape with charges effectively smeared against all sites in these classes. P272 changes this.
Under the change, half hourly data collected through the automated meter will be used to calculate how much it costs to supply each individual site and used to calculate its individual charges.
The change should mean more accurate charging, but it also means that it won’t just be high energy users impacted for peak time consumption. The new changes under P272 means that suppliers will be able to identify exactly when electricity was consumed, and sites will be charged more accurately to reflect that.
Who is affected?
From 5 November 2015, those businesses in profile classes 05-08 who already have accredited, automated half-hourly meters installed on site will be priced and settled half hourly. For those who don’t, suppliers have until April 2017 to ensure affected sites have a half hourly meter and associated meter operation and data collection contracts.
It’s simple for businesses to find out whether they have a site affected: the Meter Point Administration Number (MPAN) is printed on energy bills and starts with an S, followed by six different sets of numbers. The first number on the left in the uppermost row is the profile class. If it’s between 05-08 inclusive, it’s captured by the scheme.
Mandatory meter upgrades
P272 relies on a feed of half hourly data to calculate charges appropriately. For energy suppliers the impact is two-fold. For many it will mean changing the way in which their IT systems manage data flows from affected sites. Secondly, they must ensure that customers have the right meter in place to allow half hourly data to be collected.
While P272 will bring more accurate charging, there will of course be some who end up paying more, such as those sites that consume more during peak times. Conversely, there will be some winners. Sites that were paying more than they should have been will find that the more accurate method of calculating their charges works in their favour. Load management will be a big priority to those affected sites to reduce consumption during peak periods.
Minimise additional costs
Those 160,000 impacted sites need to appoint meter operators (MOP) and data collectors (DC) ahead of the 2015 or 2017 deadline. These MOP and DCs will maintain and run the meters, and collect and send the new readings to energy suppliers for settlement purposes. This means new metering charges for each individual affected site which could be significant for some businesses.
The market is competitive and shopping around for DC and MOP contracts early can provide businesses with annual cost savings in excess of £700 for every metering point. Across all businesses affected that amounts to a potential saving of £116m a year.
Don’t be caught off guard
What might seem like a simple industry process could actually have a big impact on the bottom line. At a time when business energy users are focused on finding efficiencies wherever possible, it pays to take action now and find out how your organisation will be affected. te
To find out more about p272 visit Inenco’s information hub on: p272.co.uk