P272 – Changes to your 05-08 electricity supplies

What is P272?

P272 is a regulatory obligation on all electricity suppliers that changed the way that larger non-domestic electricity supplies were billed. These supplies are now settled on the Half Hourly (HH) market which started to take effect from 5th November 2015.

Why did this happen?

Since April 2014, it has been mandatory for large non-domestic electricity supplies to have Automated Meter Reading (AMR) meters installed. This type of meter has the ability to record each half hour of electricity consumption data, and remotely send this information to the supplier.

P272 makes use of this capability, by ‘settling’ based on the Half Hourly consumption data. Settlement is the process by which suppliers match the electricity used by their customers, to the electricity they have purchased from the network. Settling each half hour is more accurate than settling only once a month when a remote meter read is received.

Previously, supplies were assigned a profile class which gave an estimate of the expected consumption pattern. By changing to Half Hourly settled, the consumption profile is accurate for each supply. By knowing how much electricity is used at what time of day, suppliers are able to provide prices which more accurately reflect the actual cost of electricity usage for each supply. This information also helps Distribution Network Operators to manage demand in their networks more effectively.

Who does it affect?

The P272 industry change only applied to maximum demand Non Half Hourly electricity supplies. These can be identified by the top line of the MPAN (supply number) – if the first digits of this number are 05, 06, 07 or 08 then this supply is affected.

What is the impact?

The change to Half Hourly settlement increased costs for some electricity supplies, but decreased costs for others. This varies for each supply, depending on how much electricity is used at what time of day, and what level of supply capacity is required. Some supplies needed installation of new meters, changes to existing meters, and / or installation of fixed communication lines. The industry change also resulted in changes to contracts mid-term.

Key dates

There was a transitional period whilst this change was rolled out:

Before 5th November 2015
– Supplies with contracts ending before this date were able to agree new contracts with an end date before 1st April 2017, without the requirement to change Measurement Class to Half Hourly.

5th November 2015 to 1st April 2017
– Supplies with contracts ending in this period needed to change Measurement Class to Half Hourly at the point of contract renewal.

1st April 2017
– Supplies needed to be Half Hourly settled by this point.