Electricity Definitions

(All you really need to know)

The electricity market in Great Britain has been progressively opened up to competition and from mid-1999 all consumers have been able to buy power from whichever supplier they wished.

There are a large number of companies licensed to supply electricity in Great Britain today. A full list is provided by the industry regulator Ofgem (Business Electricity - Domestic Electricity).

There are two main business user types, those with large ('over 100kW') sites and those with small ('sub-100kW') sites. Both types have different requirements and characteristics and for this reason we have split them in this section. Obviously firms with more than one site may find themselves falling into both categories.

Small sites are where the demand for electricity does not exceed 100kW (or approximately £12,000 per annum) at any one time. The profile type in the supply number will be between 01 and 08. Smaller customers have only been able to choose their supplier since the rules changed with deregulation over the last four years.

Large customers are those with a site that has a maximum demand of 100 kW or more at any one time throughout the year (generally sites with an annual bill of at least £12,000). The profile type in the supply number will be either 00 or left blank.

If you are a large customer you must have a contract based on readings taken each half hour period during the day. These are known as half-hourly metered contracts and the price of electricity will vary depending in part of the national demand for power at particular times in the day.

Large customers must have appropriate metering (Code 5 or above) which are operated and maintained by an approved Meter Operator (MOP). The data from these meters must also be collected by an approved Data Collector (DC).

A full list of approved meter operators and data collectors is available from the industry regulator, Ofgem.

Comparing Offers

Offers are notoriously difficult to compare. Different suppliers bundle different elements together, which makes the precise factors very difficult to isolate.

Potential suppliers can be asked to respond to a customer request by listing the various aspects of the prices and charges that are to be applied

Pass Through or All-In

Currently it is possible for customers to ask for a 'pass through' contract or an all-in contract. With a pass through contract the pure energy price is set down and it is agreed that all other charges – from the Grid, the distribution system, etc, are passed straight through to the customer. This can be particularly beneficial when a customer wishes to compare supplier energy prices.

Some suppliers will offer 'all-in' pricing. With an all-inclusive contract, the supplier has to take a view on the likely level of these extra charges. All-inclusive contracts are convenient and simple. A single price is paid for electricity and so expenditure and budgets are relatively easy to work out. However, the 'convenience' element will inevitably have a cost.

In general, because of the reduced risk to the supplier, pass-through contracts are likely to result in keener prices.

Payment

Some suppliers offer additional discounts for payment by direct debit. When you sign up to a contract with a new supplier you will not notice any significant changes. You will continue to pay in the same way as before, only at a lower price. In return for this saving you will normally commit to an electricity supplier for a set period of time (generally, 12 or 24 months).

Your new electricity supplier is responsible for the transfer of supply. They will contact your current supplier and ask them to read your electricity meter and send you a final bill; in due course you will be billed by your new provider. The only changes you will notice are the name of the supplier on your bills and the lower electricity charges that this will entail. Customers should insist that bills are on time and the data should be in an appropriate format: for example, they can be supplied in an Excel format which will allow it to be incorporated into a business's finance and administration systems. More than one site can be covered on a single bill. As the electricity supply industry has been progressively deregulated, the statutory protection offered to customers has decreased. Customers still have access to formal complaints procedures, though, through the Electricity Consumers Council. The address can be obtained from Ofgem. In the event that the Council cannot achieve a satisfactory result, the matter can be referred to Ofgem itself for resolution and, ultimately, to the Office of Fair Trading.

How easy is it to change supplier?

The termination procedure will be set down in the contract. However, for smaller customers, the period is normally 28 days. There are a number of electricity suppliers to choose from. Licensed suppliers are bound to accept a consumer as a customer if that person or organisation accepts their standard terms and conditions.

Does anything else change when I change supplier?

For smaller consumers, the only difference will be that the bill comes from another company. For larger users on half hourly contracts, the Meter Operator and Data Collector may change if their services were 'bundled' with the supply contract.

Active Power: the product of the voltage and the in-phase component of the power supply. Measured in watts and also known as 'useful power'.

Code 5 metering: meter required for half-hourly contracts.

DC: Data Collector

DUOS charges: Distribution Use of Systems charges. These relate to the costs incurred by using the local distribution network and are paid by all users of the network.

Electricity Pool: the system by which electricity is traded between generators and suppliers (as well as some very large consumers)

Load factor: the proportion of possible maximum consumption levels normally achieved by a customer. The higher the load factor, the more level the consumption profile.

LLF Class: Line Loss Factor: Details what Duos and line loss factor class the customer is in i.e. what Duos charges apply and what electrical loss have to be accounted for.

Maximum Demand: the maximum power supplied to a customer. Supply contracts may be based on maximum demand requirements. The metered maximum demand is numerically twice the largest number of kilowatt hours (kWh) of kilovolt-amp hours (kVAh) consumed during a half hour within a specified period.

MOP: Meter Operator

MTS Code: Meter / timeswitch details: details which time pattern applies for a multi-tariff supply and other technical information.

New Electricity Trading Arrangements: a system due to be introduced at the end of 2000 or early in 2001 which will replace the present operation of the Pool with a system of long term bilateral contracts between generators and suppliers combined with a short term on-the-day trading arrangement to cover day-to-day fluctuations in national demand.

Power factor: the ratio of active to reactive power. Customers with low power factor (below 0.9 normally) may be penalised under some types of contracts.

Public Electricity Supplier (PES): the owners of the distribution networks in Great Britain, i.e. the 14 Regional Electricity Companies.

Reactive power: A part of the electricity supply that does not provide usable energy but can affect the efficiency of the system. It is the product of the voltage and the out-of-phase component of the alternating current and is measured in volt-amps-reactive (VAr).

Regional Electricity Company (REC): the companies operating the distribution network in England and Wales

STOD: Seasonal Time of Day tariffs. One of the common types of published tariff available from suppliers.

Triads: a charge imposed on half-hourly metered customers by the Grid. It is based on to the times of national maximum consumption during the year.

Settlement and Agents Charges:

These include charges to:

Data Collection: – An organisation accredited by the Pool Accreditation Body to carry out Data Collection for Half Hourly (HH) Metering Systems. The DC is appointed by the Supplies to retrieve and validate metering data and forward it, by Metering System ,t o the Data Aggregator. The DC may be appointed by the customer but must always be accredited and contracted to the customer’s Supplier. The meter Operator provides the DC with metering equipment technical details for Metering Systems to be collected.

Data Aggregator: – An organisation accredited by the Pool Accreditation Body to carry out Data Aggregation for Half Hourly (HH) metering data. The DA is appointed by a Supplier to aggregate HH consumption from Half Hourly Data Collector(s) appointed by that Supplier within a GSP Group. The DA applies Line Loss Factors to the processed HH consumption. HH Data Collectors will supply and forward the aggregated information to the GSP Group Agent operating Initial Settlement and Reconciliation for the GSP Group.

Fossil Fuel Levy: – Fossil Fuel Levy is a Government imposed charge paid by all consumers (either explicitly or implicitly) to fund nuclear and renewable sources or energy. This does not apply after 1^st of April.

Climate Change Levy: – . The climate change levy (CCL) is a tax on industrial and commercial use of energy and was introduced on 1^st April, 2001. The Climate Change levy applies to sales of electricity, coal, natural gas and Liquified Petroleum Gas to the business and public sectors.

Supply Number