ADA responds to DCUSA on TCR charges banding for peaky demand customers


ADA responds to DCUSA on TCR charges banding for peaky demand customers

 

Consultation DCP 412 | Allocation of banding for Targeted Charging Review (“TCR”) Charges for ‘Peaky’ Final Demand Customers
By Distribution Connection & Use of System Agreement (DCUSA)
Closed 31 July 2024
Summary The recent reform of residual charges through Ofgem’s Targeted Charging Review (TCR) and subsequent DCUSA Change Proposals (such as DCP360) has led to an unintended consequence whereby customers with low annual consumption, but with high-capacity requirement needs are seeing bills that are overly excessive on the basis that such customers residual costs are allocated based on the Agreed Supply Capacity (ASC) over both Distribution & Transmission Use of System charging.

For such customers the new fixed residual charge is based on connection agreements which in most cases the ASC reflects as a regular anticipated peak capacity. However for others, this peak capacity is very infrequently used and most of their demand is at significantly far lower levels of maximum capacity requirements.

ADA’s response focuses on the impacts upon internal drainage boards (IDBs) who are local public authorities that work to reduce the risk of flooding and carefully manage water levels across lowland England. The many IDBs that operate hundreds of pumping stations to reduce the risk of flooding have seen very large increases in their standing charges for electricity supply to these sites since the implementation of the TCR. These increasing costs have put substantial pressures upon the finances of IDBs, and by extension the local agricultural land managers and local authorities that fund them.

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