Targeted Charging Review

The way we generate and use Electricity is changing, so the government is reviewing how network charges are collected, with an added focus on recovering a fair share from each customer. There will be winners and losers.

The current system allows some consumers to reduce their demand at peak times in exchange for lower network charges. This does place an additional financial burden on those that do not.

Going forwards, there will be a greater emphasis on fixed charges, based on the type of customer, metering and expected use. Banding will likely be whether domestic, unmetered and for business customers, total volume or Available Capacity.

Transmission charges were due to change April 2021, moving away from being collected via the consumption-based Triad periods. Due to delays in issuing guidance to energy suppliers, this has moved to April 2022. Distribution charges will have a greater element of fixed costs, moving away from Red, Amber and Green, also planned for April 2022.

This does avoid, what was a high risk of fixed price Electricity contracts being opened by suppliers from April 2021, to factor in these changes at short notice. However, until there is clarity, prices from April 2022 are unlikely to truly fixed.

Additional changes are expected from 2023 to look at the remaining charges, based on when Electricity is used. For example, incentives to avoid periods when Electric Vehicles will be charged.

Indigo Swan will continue to engage with suppliers and provide updates. We are more than happy to discuss how we can support you.

Book a free consultation today

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