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UTILITY WEEK | 10TH - 16TH JULY 2015 | 23 Customers Analysis T he industrial and commercial electri- city supply market is worried about the introduction of across-the-board half-hourly charging, specifically how it is going to be introduced and what the effect will be. As with the domestic smart meter rollout, stakeholders complain that some of the details are too vague, but one fact is now clear. Aer regulator Ofgem announced a year's delay to the implementation date last week, half-hourly charging for business electricity users will not be mandatory until April 2017. The new charging regime is called P272, and it requires all non-domestic electric- ity users to be billed based on half-hourly data reads from advanced meters if they are in profile classes 5-8. This means it mainly affects mid-sized businesses. Large electric- ity users are already on half-hour meters. The postponement of the start of the new regime had been expected, having been first called for back in February 2014 by Elexon. Speaking on behalf of the balancing and set- tlement code panel, Elexon was concerned that the short timescales for implementa- tion combined with the large number of sites involved, presented a risk to "settlement accu- racy" and "interrupted supply contracts". Ofgem shared these concerns, but was unwilling to delay the rollout until someone proposed an alternative schedule. This was duly done, by Npower through the mecha- nism of an urgent modification (P322), which sets out revised implementation arrange- ments. P322 requires suppliers to start migrating affected customers to half-hourly meters by 5 November this year, and speci- fies the mandatory reporting of progress on a monthly basis. Ofgem said on approving the exten- sion: "We consider that the P322 alternative, together with extending the P272 implemen- tation date, will significantly reduce the risk of contract interruptions." However the full impact of the delay is hard to determine at this stage. Custom- ers should not be le without power when the switchover occurs, but they will have to wait longer to reap the benefits of being on a half-hourly meter. As for suppliers, they have been given longer to move customers on to the new regime, but the start date has not been pushed back. Npower's business relations manager, Dan Meredith, says Npower is "very pleased with Ofgem's decision to offer a longer win- dow for businesses which need it, rather than pursuing a hasty rollout. The new dead- line gives us more time to communicate the potential costs and benefits of these changes to our customers, while ensuring that the implementation is as smooth as possible". However, the delay means some cus- tomers will not be able to benefit from half- hourly charging, perhaps for up to two years. Some suppliers were against the post- ponement of the deadline, such as Smartest Energy. It argues that the decision means a long period of uncertainty for customers and will hinder competition. "We believe that either the level of churn will reduce significantly for a period of two years, or that many customers will enter into contracts which need to be re-opened. This will happen because suppliers will not know for certain at the time of pricing what kind of meter the customer has," Meredith said. Theoretically, P322 should mean there are no bottlenecks in moving customers from old meters to half-hourly meters. In April this year Ofgem openly expressed its "disap- pointment" with "the pace of the industry's preparations to date for the move to half- hourly settlement". Now Ofgem will be get- ting monthly reports, so it will be aware of any foot-dragging on the part of suppliers and be able to take action long before the April 2017 deadline heaves into view. However, P322 in itself causes problems, according to some in the industry. Inenco's chief commercial officer, David Cockshott, says: "While it seems sensible to adopt a phased approach to avoid process pitfalls, the decision to change P272 timescales means that some affected businesses will still be charged and settled half hourly from this November. "The amendment means businesses in phase one will need to plan for new charges and arrange their metering contracts in just five months. Other businesses have up to 18 months to prepare for changes." The switch to half-hourly charging is not without cost for businesses, and the sooner they know when they will be affected, the better. But so far P272 has been poorly pub- licised, so communication will have to be vastly improved. Until the process starts with suppliers submitting their first monthly migration plan, it will be difficult to know how it will all play out. One thing is for sure, if they know about P272, business electricity cus- tomers will continue to be concerned. If they don't, they soon will be. Half-hourly countdown Ofgem has postponed the deadline for the introduction of mandatory half-hourly metering by a year, but suppliers will be under close watch to stick to the new schedule, says Lucinda Dann. Graph shows data from 19 suppliers, including the big six, and accounts for two-thirds of all expected profile class 5-8 sites. The data was used to determine the time parameters for implementation under P322. Sites will be migrated to half-hourly charging at contract expiration. 95 per cent of contracts will have expired by April 2017. Source: Elexon Number of PCS-8 metering systems with advanced meter with contracts expiring by month Number of PCS-8 metering systems with no advanced meter with contracts expiring by month Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19 Sep 19 Dec 19 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0