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Electricity Understood - Do you have the power to change?
Electricity Guide In addition to the charges included within your unit rate, you may also see additional charges for costs that the electricity industry incurs in delivering your energy. These are called pass through charges and they are normally included on bills to cover the costs of third parties involved in the energy supply chain to deliver your electricity.
The Standing Charge
Standing Charge covers the support and maintenance of the electricity distribution network and any associated distributors administration costs. It is calculated at a fixed monthly or daily rate over the period of the bill, aand the rate reflects the costs of the local distribution company.
The Capacity/Availability Charge (KVA)
The availability charge contributes towards your distribution company’s maintenance costs to provide the electricity supply connection to your business for both active power or real power which converts current flow into useful energy for lighting and heating, measured in kilowatts (KW) and reactive power measured in kilovolt amps (KVA). The supplier will inform the electricity distribution network operator (DNO) the company that maintains the electricity network of the agreed amount of electrical load to make the capacity available to your business. This charge is known as the capacity or availability charge and is measured in £ per KVA (Kilo Volt Amps).
Excess Capacity/Availability Charges
This is a penalty charge applied by certain suppliers to clients who are drawing KVA above their Available Supply Capacity (ASC). In some cases this can be three times the contracted £ per KVA rate.
Reactive Power Charge (REAP)
A reactive power charge is a charge for the difference between the electricity supplied and the electricity converted into useful power. The power factor or fake power is how effectively electricity is being used on a site measured in kilovolt amps (KVAr). Certain types of equipment like motors and drives cause poor power factors, which reduces the capacity of the network to supply power. If this happens then certain suppliers and distribution companies will enforce a penalty charge for this, through reactive power charges because it puts an additional strain on the distribution network and this charge is a contribution towards those additional costs.
Combined HH/NHH Data Charges
This reflects the costs associated with collecting and handling your metering data. Data collection methods include remote dial up, which requires a dedicated communications line, or more costly manual meter reads.
Settlement Agency Charges
Behind the scenes the distribution companies, suppliers, metering companies and others need to settle up and recover their costs from each other. The UK’s balancing and Settlement Code Company called Elexon, maintains the system within which this activity is governed and this charge relates to their costs. The documentation that governs these arrangements is known as the Balancing and Settlement Code (BSC). For additional information, Elexon’s website can be found at www.elexon.co.uk
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