The Targeted Charging Review (TCR) by Ofgem has been assessing how residual network charges should be set and recovered in Great Britain as the energy network continues to evolve. The key driver of the review is the changing role of energy networks.
For those NFU Members that have Half Hourly metering or are high energy users, there is a new Third -Party Charge (TPC) being introduced in April 2022.
TPCs currently account for about 55% of your unit rate and with the new TCR charge coming in, we are seeing suppliers increase the standing charge to cover this cost. Prices will inevitably rise.
What is the TCR?
The TCR will be an additional charge banded around usage (kWh) and Agreed Supply Capacity (ASC). Nothing has been finalised yet and Ofgem have already delayed the implementation by 1 year, but the idea about banding is it will look at your usage and your ASC. If you have a high ASC or are a heavy user, you will be in a higher banding and therefore it will cost you more.
How are bands allocated?
- Agreed Supply Capacity (ASC) for Half Hourly settled meters, this is measured in kVa (Kilo Volt Amperes).
- Net annual consumption for standard meters.
- Average of 24 months prior to calculation, therefore, what you reduce now will not affect the cost as the calculation will from data 2 years before.
Can you change bands?
- Band allocation will be set until April 2026.
- To change bands prior to April 2026 you will need to reduce your ASC or consumption by around 50%.
- The next band allocation will happen in April 2024 .
Of course, this is all still being calculated by Ofgem so we are unable to let you know what the cost will be. Suppliers are now working to calculate these costs and will include them in your fixed contract renewal so that you do not have a large pass-through cost later (though as always, this cannot be guaranteed 100%, even on the most fixed of contracts). For standard meters we are seeing an increase in the standing charges from some suppliers, and I suspect that this will become more widespread over the next year or so. We will keep you updated on the developments as we learn more.
If you want to find out more on this charge and other Third-Party Costs then please call our bespoke team on 024 7669 8885