...and we’re not just talking about the new tax year! 1st April 2017 marks the implementation deadline for P272 legislation.
What is P272?
In simple terms, this legislation changes how suppliers will settle power consumption and enforce Half Hourly (HH) metering where required. The legislation applies to all maximum demand meters with a meter profile of 05, 06, 07 and 08.
The legislation is designed to help secure future UK electricity demand and help suppliers plan generation of electricity. We can also expect to see changes to the way that suppliers charge to supply that energy.
You may have also heard of this legislation as P322 as the implementation arrangements were revised to allow for the extension to 1st April 2017.
What are the challenges?
Each supplier faces a number of challenges with how they manage the implementation of P272 legislation and the associated costs. It is up to your supplier to ensure that your meter is compliant with the regulation but in our experience suppliers are not communicating the requirements in a user-friendly manner. If your business meets the requirements for P272, your supplier should have already written to you and will have put the relevant steps in place to make sure that you have the correct meter in place.
If you are a BCR Associates client who has their energy contract with us, then it’s likely that we will already have spoken to you about this. However, having worked closely with our energy supply chain since the regulation was announced, it’s evident that the process is not that straightforward. We are finding that suppliers are struggling with demand for migration to Half Hourly meters and how to cope with the changes. As we near the deadline you may see costs on your invoices that you have never seen before. Suppliers may also experience internal issues surrounding allocation of the work.
If the deadline is not met, suppliers will be fined and this will be public knowledge. This will be a good indicator of those suppliers that are struggling to deal with the implementation of P272 and it is advisable to keep a close eye on your invoices and costs in this instance. The good news is that any fines for non-compliance will be directed at the suppliers not at the business to whom the energy is supplied.
The installation of Half Hourly metering is coupled with its own legislative requirements where a Meter Operator (MOP) agreement is mandatory and the nomination of a preferred Data Collector (DC) is advised. It is important to be aware that most suppliers have selected their own MOP and DC providers that they will automatically nominate if you do not have a direct contract in place. In most cases the default rates associated with this will be more expensive than if you have made your own arrangements.
Our advice to you...
- Know your capacity – If your business has gone through the migration to Half Hourly as part of P272 you will start to be charged for capacity. Depending on your supplier and the contract in place you may or may not see this as a separate line on your invoice. For future contract renewals and negotiation, you will need to know your capacity so that you can check that your business is being charged for the right amount.
- Ask the experts – This legislation can be tricky to get your head around. If you are unsure of where you stand speak to your BCR Associates consultant who will be able to help. We can find out if you have been successfully migrated or liaise with your supplier to find out what needs to be done to ensure that your energy contract is on the right track. Additionally, we can make sure that you have the correct energy product for your business making sure that you have the right contract in place to streamline your energy costs.
- Shop around for your nominated MOP agreement provider – If your business' meter arrangements meet the requirements for P272 then you will have to set up a MOP agreement. However, the good news is that you do not need to use your supplier to provide these services and you are free to shop around and choose the right provider that suit your business needs.
- Take advantage of the benefits – Whilst there are a number of headaches associated with the implementation of P272 there is a lot to be gained from more frequent, automated meter readings and correlated billing accuracy. Having easy access to data and reporting minimises the risk of any incorrect charges and heightened awareness and understanding of your business’ energy consumption will allow you to implement efficiency strategies and make cost savings.
For the time being, businesses with energy profile classes that are outside 05-08 are exempt from needing Half Hourly meters. However, we advocate heightened awareness of business energy usage and feel strongly that the fundamental principles behind P272 regulation should apply for all businesses. Essentially, those businesses that understand the factors that affect energy usage, including production, weather and employee behaviour will find it easier to plan future energy spend and reduce consumption where applicable.
To talk to one of our energy experts, please call 03330 433 233.