If your site is half-hourly metered, part of your electricity bill has nothing to do with how many units you use. Every day you pay a capacity charge on your agreed capacity, measured in kVA, whether you use it or not, and in any month you go over it there’s an excess capacity charge on top. The good news? This is one of the few network costs you can actually do something about, and we’ll help you get the figure right.
Maximum Demand and Agreed Capacity: What They Mean
Every half-hourly connection has an agreed limit on how much power it can draw from the local network. You’ll see it called maximum import capacity (MIC), available supply capacity (ASC) or agreed capacity. It’s the most power your property can draw from the network at any one time, measured in kiloVolt-Amps (kVA), and it’s the figure you agree to stay within in your connection agreement.
Maximum demand is what your site actually reaches: the peak your meter records, which should stay below your agreed capacity. Older maximum demand meters had a register that recorded exactly this peak, and they’re the supplies you’ll see in profile classes 5 to 8.
Why kVA rather than kW? Because kVA measures total power: the active power (kW) your equipment turns into useful work, combined with reactive power. The relationship between the two is your power factor. A site with a poor power factor needs more kVA of capacity for the same useful work, and you’ll see that in your charges.
How kVA Charges Show Up on Your Bill
Capacity charges are part of Distribution Use of System (DUoS) charges, the fees your local network operator charges your supplier for carrying electricity to your site. Your supplier passes them on to you. Here’s what you’ll see on a half-hourly bill:
- Fixed charge: A daily amount per MPAN (meter point), in pence per MPAN per day.
- Unit charges by time band: Red, amber and green rates per kWh. In the Midlands, for example, red runs from 16:00 to 19:00 on weekdays. Time bands differ between network areas.
- Capacity charge: Pence per kVA per day on your agreed capacity. The higher your Maximum Import Capacity, the higher your capacity charge.
- Excess capacity charge: Pence per kVA per day on anything above your agreed capacity.
- Reactive power charge: Pence per kVArh for reactive power outside a 0.95 power factor, which good installation design generally avoids.
The capacity charge lands every day, used or not. If your agreed capacity is far above what your site ever draws, you’re paying for headroom you don’t use. If you’re a larger site-specific customer, your agreed figure can also decide which charging band you’re placed in, so it’s one of the non-commodity costs we’d always check first on your bill.
Going Over: How Excess Capacity Charges Work
Go over your agreed capacity and the excess is charged for the whole billing period in which it happens. It’s worked out from the highest kVA your site used in the month, minus your agreed capacity. Excess charges apply only to the month you go over, so one bad month doesn’t follow you around for a year. Since the DCP161 rule change in April 2016, though, excess capacity is charged at the full rate, without any connection discount you get on your capacity charge.
It’s still money you’d rather keep. Picture a site that runs close to its limit on cold mornings, when every heater and machine starts at once. It can end up paying excess charges month after month. That’s usually a sign the agreed capacity is too low, or that start-up loads could be staggered, and it’s exactly the kind of pattern we can spot in your half-hourly data.
If your site has only just moved onto half-hourly settlement, you get a year’s breathing space. That’s thanks to DCP414, a change to the rules for network charges that came in on 1 April 2024. It covers larger sites with current transformer (CT) meters, the type fitted where a site draws too much power for an ordinary meter, that are moving from non-half-hourly to half-hourly settlement. For the first 12 months after the move, you don’t pay capacity charges at all. At the end of those 12 months, your network operator looks at the highest demands your meter recorded and sets your agreed capacity (MIC) from them. So you’ll want that year to reflect how your site really runs, and we can keep an eye on your data with you while it happens. As of October 2026, market-wide half-hourly settlement is under way, so more sites are going through that transition.
Lowering Your Agreed Capacity: Get It Right First Time
If your site uses far less than its agreed capacity, it can be lowered through your network operator. The rules are much the same whichever network you’re on:
- Once a year: Capacity can only be changed once in any 12-month period.
- From the next month: A reduction takes effect from the first day of the month after it’s agreed, and it can’t be backdated.
- A new connection agreement: The network operator issues one for you to sign once the new MIC is agreed.
- Bills follow later: Your supplier updates your bill, and there can be a lag.
Don’t cut too deep, though. Capacity you release goes back into the network for others to use, so getting it back later may cost money. Imagine a manufacturer that trims its capacity to match a quiet year, then wins a big contract and needs to run an extra line. The saving on capacity charges could be wiped out by the cost of buying capacity back. The right figure fits your long-term plans, with sensible headroom. Before you make the call, talk to our Energy Team and we’ll go through your half-hourly data and bills with you.
What This Means for Your Business
Your half-hourly data tells the real story of your peaks, month by month. It shows whether your agreed capacity is right, whether you’re paying excess charges you could avoid, and whether a reactive power charge is pointing to a power factor problem on site.
Your capacity counts at renewal time too. Capacity and other network charges are part of what suppliers price, so we gather your meter details, usage and contract end dates before we ask for prices, and the quotes you get back are more accurate for it. If you’re running several sites, that groundwork across the whole portfolio is a big part of how we look after large business energy customers.
How Black Sheep Utilities Can Help
- See your peaks: Our Half Hourly Meter Report sends your half-hourly consumption, summarised, to your inbox, so you can spot your highest demand periods. You can stop it at any time.
- Check what you’re charged: Our bill validation checks each bill against your agreed rates and recorded consumption, and we take up any errors with the supplier.
- Compare suppliers in writing: We compare business electricity prices from suitable suppliers for your sites and present the options that best suit your business.
Final Thoughts: Pay for the Capacity You Need
Capacity charges are easy to miss and easy to overpay, but they’re far from out of your hands. If they’re a big line on your bill, the place to start is your own data: sign up for the Half Hourly Meter Report, or call our Energy Team on 01273 914000 and we’ll talk you through it.