Utility Week

UTILITY Week 11th November 2016

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UTILITY WEEK | 11TH - 17TH NOVEMBER 2016 | 13 Policy & Regulation Market view B usiness energy customers should make a note in their calendar of 1 April 2017 – significant changes are afoot. With the introduction of P272 legislation, their electricity bills are about to get a great deal more complicated. From the start of April 2017, business energy bills will be calculated in a com- pletely different way. Instead of an annual reading, electricity meters will automatically send a reading every half an hour to the sup- plier, so energy retailers will be calculating business customers' new energy bills based on an extra 17,519 readings a year – or 17,567 in a leap year. The chances are that most businesses are currently on a 05-08 electricity meter, also known as a max demand meter. Energy companies calculate the bill based on one yearly reading; aer fiddling about with the numbers, they eventually land on something that looks like the business's bill. While this might make for an easy-to-read utility bill, it doesn't give the customer an accurate picture of when they use electricity. The biggest thing business customers will notice is that their bill is about to get very confusing. And while they might be able to take advantage of off-peak power like never before, it also means they could get stung by peak prices. It gets more complicated when you con- sider that each energy supplier will roll out this switch in a different way, and there are currently no set standards for peak times. Some businesses may already be using a half-hourly (HH) meter. As of 5 November 2015, all businesses using an automated and accredited electricity meter within the 05-08 class were switched to HH billing. Businesses outside the 05-08 class will all be switched over on or before 1 April 2017. For many businesses, this means budgeting for a hike in prices in 2017. Charges will vary at different times of the day, so the 3pm tea break could soon get a little pricier. That said, companies with atypical office hours could see a fall in their energy bills, as they will be able to make the most of the off- peak power. Another factor will be the additional charges for managing this new billing pro- cess, which the energy companies will be passing on to the business customer. A com- pany's fancy new smart meter will require a meter operator and a data collector, so if businesses don't want to risk getting lum- bered with one appointed by their utility pro- vider, they will need to shop around for the best deal. Change can be a good thing, provided that businesses are well prepared for it. As we all know, knowledge is power. So while customers might not be able to make head nor tail of bills calculated on half-hourly meter readings, in the right hands the data that it contains could be very compelling. Given their stronger understanding of how businesses use their energy, a business energy broker could be in a better position to negotiate with energy suppliers on behalf of business customers. Elizabeth Ireland, marketing communications executive, Watt Utilities A world of complexity Business customers could be left scratching their heads over the coming months trying to figure out the new-style electricity bills. Elizabeth Ireland explains how to crack P272's complicated nut PRICE CHARGED PER UNIT METER READINGS Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Electricity consumption Months Pre-P272 billing P272 billing Under the pre-P272 billing regime, a business's electricity consumption is calculated using a single meter reading per month (12 per year). Under the P272 regime, consumption is calculated using half-hourly meter readings (17,520 per year). 24-hour period 1.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00 22.00 24.00 hours of business Pre-P272 billing P272 billing Price per KWh Under the pre-P272 billing regime, the supplier charges a fixed unit rate split into a day and a night rate, with the prevailing rate charged regardless of when in that period electricity is used. Under P272, the supplier can charge multiple unit rates during the day, with each rate depending on the exact time that electricity is used. Source: Utilitywise Source: Utilitywise

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