DCP 228 will come into effect from April 2018, altering the way distribution charges are calculated.
DCP 228 is a new regulatory change which will be implemented by OFGEM from April 2018, altering distribution charges depending on usage. As a result, the non-energy costs which business’ are billed for could rise and measures may need to be taken to reduce costs.
Non-Energy costs currently make up 55% of your delivered electricity rate, with distribution charges accountable for 19% of these charges – watch our video to see a breakdown of these costs.
The primary distribution charge is DU oS (Distribution Use of System) which is based on usage and is calculated by a banding system (red, amber & green). DCP 228 will result in a revision in DUoS charges so they reflect the costs incurred by network operators during peak and non-peak times.
Common Distribution Charging Methodology (CDCM) will also be affected by the changes, as will the way customer tariffs are set. Currently, under the CDCM structure, electricity used during a red band (peak) period is priced a lot higher than amber or green. This change will lower charges incurred during a red band period and raise charges when energy is used in a green or amber period, this will result in a more balanced charging system between each band.
Because of this change is structure, all businesses will be affected with the exception of the nation’s largest electricity connectors which fall under Extra High Voltage Distribution Charging Methodology (EHVDCM).
Most businesses with half-hourly meters will see a rise in energy costs, although those which have a high usage at peak periods could see a small reduction. These costs will also be dependent on the business property’s region and Distribution Network Operator.
Apollo Energy’s data analysis service allows you to monitor what times your business uses the most energy, giving you the opportunity to reduce usage during expensive periods. For more information, call us on 01257 239500 or fill out the enquiry form on our contact page.