Is Your Business a Large Energy User?
Changes to the Balancing and Settlement Code approved by Ofgem in October 2014, known as P272, altered how energy meters are now charged. In the past, these changes were only applicable to energy intensive businesses that had 00 meters. What now constitutes as a large business energy user has been expanded.
Why am I now classed as a large user?
Most users will assume that their energy is sourced only from their supplier, although this isn’t quite the case. The Distribution Network Operator (DNO) for your region will send electricity to your provider. A little history – in the past the DNO was also a business’ energy supplier, before the market was de-regulated in 1998, it wasn’t possible to make a choice and the supplier of a business was determined by the company’s postcode. This is no longer the case.
Upon market deregulation, consumers suddenly had a lot more choice. This meant that a DNO was required to supply enough energy to a variety of providers for the region in question. With these changes being implemented, suppliers currently estimate how much energy they will require well in advance. This makes certain that they are able to supply business and domestic customers at the price promised.
However, one challenge when dealing with larger commercial users is that they need significantly more power than the average home user. For this reason, the premises must be monitored more closely to ensure that enough power is available under different conditions.
HH billing requires an Automated Meter Reading (AMR) meter to supply usage data directly to the supplier every 30 minutes. This has two benefits:
- The supplier can now more precisely estimate the amount of electricity needed
- Billing is far more accurate for the consumer
Usage levels must be increasingly specific to ensure that there isn’t a power outage that could affect business productivity, especially as supply margins become narrower.
When taking the above into account, it is clear why many large users may think that suppliers use this as a way to generate more revenue. Although, this is in fact incorrect. It is actually necessary to ensure that there is enough electricity to go around at an acceptable market rate.
How will being classed as a large user affect my energy bills?
What should I do if I’m still not sure?
After reading this, if you are still not sure about whether your business will be classed as a large user, we can hopefully clarify this for you. By granting us permission through a Letter of Authority (LoA), Utility Saving Expert is able to assess your current position. An LoA will allow us to collect the relevant information for you. Also, we will never enter into any type of contract without your explicit permission and there is no obligation on your part.
Through our transparent practices, we hope to save commercial energy customers as much as possible on their gas and electricity bills. See how much your business could save today with our online comparison tools.