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Market research & Insight

Issue 912 | Rejection of P366

Tom  Faulkner Tom Faulkner Analyst

Ofgem decision: Rejection of P366 Change to Supplier Charge SP08a for Small Scale Non-Domestic Non-Half Hourly Hard-to-read Meters Electricity Alert 26 July 2019 Tom Faulkner Headline Assessment   1. Assessment & recommendation Ofgem made the decision to reject P366 Change to Supplier Charge SP08a Calculations to Account for Small Scale Non - D omestic Non - Half Hourly Hard - to - read Meters on 19 July following a recommendation from the BSC Panel and assessment of the Final Modification Report (FMR). Ørsted’s modification proposed that small industrial sites that are located in remote areas, are unattended, and have no telecoms coverage available for smart or advanced metering should be classified as hard to read (HTR), and volumes from them be excluded from the calculation of supplier charge SP08a. It argued that smaller suppliers are disproportionately vulnerable to the SP08a charges incurred for missing meter reads, since they have fewer sites than larger suppliers and it is therefore more likely that missing HTR reads will breach the 3% of daily volume they are allowed to use estimated reads for. Because this means they have to price the costs into their contract for the sites, Ørsted said this means they are less able to compete effectively for HTR sites. The regulator was sympathetic to Ørsted’s argument but felt that, on balance, approving P366 was going to have negligible positive impacts on competition. It noted that only ~0.02% of meters across the industry are non-half hourly (...

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