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What Is P272?

P272 was one of the biggest changes to the UK’s commercial electricity market since the deregulation of the electricity industry began in 1989.

P272 was legislation introduced by Ofgem that changed the way certain businesses were metered and billed for electricity. Affected businesses had to migrate to half-hourly meters so that their consumption could be recorded in thirty-minute blocks.

Previously, electricity suppliers often billed commercial customers based on estimates of usage over an extended billing period. The new half-hourly ‘settlement’ bought near real-time data to the market with potentially huge benefits. P272 is intended to help move the UK to a smarter, more energy-efficient economy.

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What Is P272 And How Will It Affect My Organisation?

From 1 April 2017, all businesses in the category known as ‘Maximum Demand Meters’ were legally required to have their energy consumption recorded every half hour. This regulation was meant to bring more immediate ‘settlement’ to the market.

Why is it called P272?

  • Ofgem, the industry regulator, initiated legislation to modify the Balancing and Settlement Code, and this modification is known as P272.

Under P272, companies with larger electricity usage, or Maximum Demand Meters, had to move to this new measurement class. It was a move that required the installation of new or reconfigured electricity meters.

If your business falls in profile classes 05 to 08 you are affected by P272.

  • A quick check of your electricity bill will indicate your profile class. Look at the first box to the right of the Supply Number (S). If the number is 05, 06, 07 or 08, your electricity must be settled half-hourly in terms of the regulation. Your energy supplier should therefore ensure you have a half-hourly meter.

If your business falls outside profile classes 05-08, you are unaffected and will remain non-half-hourly settled for now. P272 certainly makes sense from a smarter data standpoint. It impacted well over 100,000 UK companies. Business Energy Comparison has also helped many of these businesses transition to better gas and electricity deals.

Does P272 Affect My Business?

To see how your business is affected it’s worth briefly discussing the energy settlement process which informed Ofgem’s move to amend the Balancing and Settlement Code.

The settlement process is the trading that takes place in the wholesale energy market between energy suppliers and producers. Settlement takes place in thirty-minute blocks. If suppliers have half-hourly inputs on consumer demand, they are better able to reconcile supply and demand and their contractual purchases. The result is improved market efficiency.

Similarly, customers in this measurement class are able to achieve increased efficiency thanks to more immediate readings. Benefits come in the form of improved billing accuracy, and operational improvements.

With improved data on electricity use patterns, you are equipped to better manage your consumption. You can take more control of your consumption by spreading usage across the day to avoid peak-hour spikes. This can result in lower energy bills.

Business Energy Comparison’s team of specialist brokers and consultants can help you lower your bills further. You can save up to 45% on your utility bills by taking advantage of our contacts and expertise in the competitive energy supply market.

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Will P272 Affect My Energy Bills?

Prior to P272, billing was often based on usage estimates. Improved accuracy usually supports lower bills over time.

However, different organisations’ electricity bills were affected differently. Location, supplier, and consumption patterns are all factors that affect bills.

For many businesses, their bills actually dropped after P272 due to increased efficiency under the half-hourly settlement. But, there were other companies that faced higher bills. This was in part due to suppliers incurring additional costs and needing additional resources to process half-hourly recordings.

Additional expenses also come into the equation. Half-hourly meters require a Meter Operator (MOP) and Data Collector/Data Aggregator (DC/DA) to manage meter installation, maintenance, and data collection.

As the customer, you can contract directly with a MOP and DC/DA provider. Each agreement will cost a few hundred pounds per meter per year. Alternatively, the supplier will appoint the MOP and DC/DA and add the cost to your bill.

Consumers with a Current Transformer (CT) meter may have faced higher bills through increased network charges. This surcharge relates to the capacity network operators must reserve for Current Transformer meters on their network. From 2021, all premises with a Current Transformer (CT) meter were required to switch to the designated advanced meter.

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When Will P272 Happen?

P272 has been in operation for a number of years. The P272 legislation came into effect on 5 November 2015. Since that date, all profile class 05-08 customers starting a contract with a new supplier or renewing their existing contract had to be on the advanced metering system.

The deadline to complete the change of measurement class process was 31 March 2017. From 1 April 2017, all qualifying businesses were expected to be on advanced metering systems and subject to half-hourly readings.

It’s believed that smarter technology and other benefits of more immediate settlement should offer better energy prices. It also allows customers to save by managing their peak time consumption.

Will P272 Mean I Need To Replace My Meter Type?

If you are a profile class 05 to 08 business, your meter almost certainly won’t need replacing. Suppliers have had to supply 05 to 08 sites exclusively through advanced meters since 6 April 2014. The majority of 05-08 meters are sure to be advanced AMR devices by this stage.

AMR stands for Automatic Meter Reading. This is the technology that supports automatic half-hourly readings. A half-hourly meter (HH) sends a reading via a fixed line to the supplier every 30 minutes.

Some of the benefits of HH meters and automated meter readings are:

  1. Improved accuracy
  2. Eliminates manual meter readings
  3. No more estimated billing
  4. Convenience
  5. Improved data insights on usage patterns

The data on electricity consumption can help both businesses and suppliers make smarter choices.

If for any reason your AMR meter is not configured to HH, your supplier or Meter Operator should make arrangements to change this. Electricity suppliers have an obligation to ensure that advanced meters are fitted at required sites.

If you are a smaller consumer and not settled half-hourly – e.g. profile class 04 – and you feel an HH meter may benefit your growing business in the future, you can get more detailed information on HH meters here.

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Does P272 Affect My Billing Details?

Though P272 was implemented to improve the industry, it’s safe to say that advanced-meter bills can be complex. They may include a number of items not found on non-HH bills such as:

  • Meter Operator charges
  • Data Collector and Aggregator charges
  • Distribution Use of System (DUoS) charges
  • Transmission Network Use of System (TNUoS)
  • Extra charges on peak period consumption

Since utility bills are so complex, mistakes often occur. If you want clarity and peace of mind around your billing, Business Energy Comparison offers a bill validation service that ensures you only pay for the energy you actually consume.

Compare Commercial Energy Prices With Business Energy Comparison

Business Energy Comparison provides a comprehensive price comparison, advice, and switching service. That’s why we cover the market comprehensively, from major suppliers to reputable sector-focused operators. We work with you and for you to optimise all aspects of your energy usage.

Whatever your profile class, from SME to large corporate, Business Energy Comparison is committed to offering you better energy options. Price comparison is the first step to potentially saving 45% on your utilities. Consider this well ahead of your contract renewal date.

If the best deal involves switching suppliers, Business Energy Comparison handles that process for you to ensure a smooth, successful transition.

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Frequently Asked Questions

Are households affected by P272?

P272 applies to business electricity consumers in profile classes 05 to 08. Households are not affected by P272. Domestic households typically fall under classes 01 and 02.

Can I change to profile class 03 or 04 to be exempt from P272?

The industry has had to consider the question of customers in profile classes 05 – 08 wanting to move to lower profile classes to avoid P272 requirements. From an industry perspective, Ofgem wants all qualifying businesses on this settlement system. A profile class 05 – 08 business with an advanced meter can’t readily downgrade to profile class 03 or 04.

What is Maximum Import Capacity (MIC)?

The Maximum Import Capacity (MIC) is the maximum demand level of electricity measured in kilovolt amps (kVA) that will be supplied to you by your network.