Archive for the ‘tariff optimisation’ Category

Energy & Carbon Management were asked to conduct an historic energy audit and tariff optimisation by a London-based not-for profit organisation to ensure that they hadn’t been over-charged.

A detailed analysis of current and past invoices and consumption levels quickly identified a problem with their capacity availability charge, the monthly maximum demand agreed between the client and the regional distribution company (charged through the supplier).

The client’s two supplies had a combined capacity availability set at 300kVA, yet the supplier was charging them on the basis of 300kVA for each supply – and had been since 2009.

E&CM quickly entered into negotiation with the distribution and supply companies to gain a refund of over £15,200 for four years’ worth of overcharges.

In addition, the client will benefit from an on-going saving of £300 per month (£3,600 a year) as their monthly capacity charge was halved.

An historic audit and optimisation is a quick but important way to ensure that you’re only paying what is due; as this organisation found out, it’s not unknown for energy suppliers to make expensive mistakes.

What is Capacity Availability?

Capacity availability is the figure representing the maximum amount of electricity that can be used at any one time at a supply location. On electricity invoices it is sometimes referred to as Availability, Capacity or kVA.

This fee is set and charged by the local Distribution Network Operator (DNO), not the energy supplier. It also covers investment and maintenance of the electricity supply.

Customers pay a fee (per unit) according to the agreed capacity for the site. In theory, maximum demand should not exceed the agreed capacity at any time. The maximum demand is the point in a day with the highest energy usage. On the invoice only the point of highest energy usage in the month is recorded.

If your actual maximum demand is significantly lower than the capacity level there is an opportunity to reduce the capacity and therefore your costs. Equally, if demand exceeds capacity you will likely be paying penalty charges and should increase the capacity level – or preferably implement an energy savings programme.