What is P272 and what supplies does it affect?
P272 is the industry name for a mandatory regulatory change imposed by OFGEM for certain electricity meters, of which there are around 100,000 of in the UK.
From 1 April 2017 electricity meters with profiles 05, 06, 07 and 08 (otherwise known as Maximum Demand) will be billed like half-hourly (HH) meters.
You can find out if your supply has one of the affected meters by looking at your supply number. This is always printed on your bill and usually displayed in a small series of boxes starting with a large ‘S’. The first two digits of this number refer to your profile class.
If this number is between 05 and 08 then you have a maximum demand meter. In the example below this number is 05.
e.g. S 05 808 290
23 **** **** ***
How will this impact the procurement of my next supply agreement?
You will no longer be able to procure as a maximum demand meter, instead interim agreements are put in place whereby the additional costs involved with a half-hourly supply are incorporated into your unit rates and standing charge. As such your bills will look relatively similar to what they are at present, only at potentially much higher costs to cover the additional expense that the supplier will incur from the distribution network.
When the supply has been upgraded to Half Hourly, you will then need to tender as a Half Hourly when your renewal is next due. This is more complicated than the standard procurement you may be used to and charges are broken down into many more components which may be difficult to understand. This makes comparing supplier offers a lot more difficult as not all supplier offers include all of the charges due. Contact us so we can help to guide you through the process and ensure you can compare all offers fairly in order to make the right decision and correctly identify the best deal.
What will happen to the way I’m billed?
Currently your supplier will invoice you monthly, using estimated or actual reads on a monthly basis. Going forward this will be settled on a half-hourly basis, but you will still be billed monthly. This means you will have a meter upgrade enabling the meter to take note of your usage for every half-hourly period, every day, as such providing the supplier with 48 pieces of data every single day. This will enable your supply to be settled on the half-hourly market and ultimately reduce the risk of blackouts and distribution issues, as they will have a better idea of what energy will be required and when throughout the country.
Will this mean I pay more for my electricity?
Unfortunately in most cases, yes. You may find a better unit rate on a half-hourly supply, however the additional charges, like KVA and Meter Operator (MOP) charges will offset this saving unless you are using a large amount in order to take advantage of the lower unit rates.
We have found that on average the upgrade from Maximum Demand to Half Hourly results in a spend increase of between 8-12% (based on an annual consumption of 125,000 kWh at indicative prices for supplies based in area 11 – East Midlands)
Can we avoid the mandatory upgrade?
No. In the past it may have been possible to downgrade the supply to a small commercial supply (03/04 profile), however this is no longer possible, and by April 2017 all maximum demand meters must be Half Hourly. The best course of action is to contact us to ensure the transition is handled properly.
Why is this change necessary?
P272 means that the industry should use half hourly data for ‘settlement’ in order to improve accuracy. It will also help distributors better understand electricity usage, so that they can make sure networks are maintained appropriately.
‘Settlement’ refers to how suppliers match, and pay for the energy consumed by customers, to the energy purchased on their behalf.
For non-half hourly sites, consumption is profiled across the industry, based on what a typical customer in a relevant Profile class uses. This means that suppliers must obtain meter readings before they can ‘settle’ based on actual consumption.
For half-hourly sites, the meters record and transmit the consumption reading every half an hour, rather than waiting for meter readings. This means suppliers can quickly settle their consumption based upon actual usage, and be able to offer pricing and products that reflect half-hourly costs and consumption more closely in the future.
We believe that all electricity supplies will follow the same path over time, with the small commercial supplies being upgraded next, then domestic supplies. This is purely speculation at this point, but would make sense in order to improve the way the UK distributes electricity, with the distribution network having a much clearer idea of what energy will be used and when.
