Using less.
Still paying more?
Check the fixed costs.
High standing charges can keep your electricity bill high even when usage falls. Understand Ofgem’s DCP412 proposal, then see what your business can already review.
Capacity · TCR banding · Meter arrangement · Bill checks
Ofgem could reject a proposed cut
to some business standing charges.
On 16 October 2026, Ofgem announced that it was minded to reject DCP412. The proposal would lower fixed network charges for qualifying businesses with high-capacity electricity connections but relatively low overall consumption.
The decision is not final. The consultation closes on 11 December 2026. For affected businesses, the distinction matters: a possible future change to network charging is separate from checking whether today’s capacity, banding and meter arrangements are appropriate.
This guide explains the proposal, what Ofgem’s own example shows and the reviews available now.
Why are business electricity
standing charges so high?
Your unit rate is only part of the picture. Some network costs are recovered through fixed charges, so a reduction in consumption does not reduce every part of the bill.
Standing charge
The daily amount in your supply tariff. Check what it includes and which costs your supplier bills separately.
Usually shown in p/day or £/dayCapacity charge
The cost associated with reserving electrical capacity for your site. This may be called an availability charge.
Linked to agreed capacity in kVAResidual charging band
The category used to allocate certain fixed network costs under the Targeted Charging Review, or TCR.
A separate check from capacityWhat would
DCP412 change?
Some businesses need a powerful connection for occasional bursts of activity, while using relatively little electricity over the year.
DCP412 proposes a route for eligible high-capacity, low-utilisation sites in residual Bands 2–4 to move down one band, with Band 1 as the minimum.
of agreed capacity reached in at least one half-hour within 12 months.
load factor over the same period, measuring how intensively the connection is used.
Further requirements apply. Low annual consumption alone would not establish eligibility.
The proposal redistributes costs to other users. Although Ofgem estimates the overall impact on them would be small, it considers the evidence insufficient that the proposed classification appropriately targets affordability pressures or improves supplier competition. The decision is still under consultation.
What could a one-band change mean?
Ofgem illustrates an East Midlands site with 170 kVA agreed capacity, 163 kVA maximum demand and 37,200 kWh annual consumption. Its 2.5% load factor means it makes relatively little use of a connection it still needs.
These are the example’s combined transmission and distribution residual charges, not a supplier’s complete standing charge. The annual difference is our calculation: £3.31 × 365 days, before VAT. This is not an approved reduction or a saving available to claim. See Ofgem’s example, page 22 ↗
Which part of your
bill needs a closer look?
You do not need to wait for the consultation to investigate your current arrangements. Start with the issue you recognise.
“We no longer use
all this capacity.”
Compare the agreed kVA with demand history, operating headroom and future plans. A reduction may be sensible where the evidence supports it.
Explore a kVA capacity review ↗“Our TCR band
doesn’t look right.”
Check the site information, allocation and any applicable review criteria. A high charge alone does not establish that the band is wrong.
Ask us to check the banding →“We inherited a meter
for a bigger business.”
A Change of Measurement Class (CoMC) or wider meter-arrangement review may be relevant where the site’s needs have changed.
See the CoMC route ↓“I just want to know
what I’m paying for.”
Reconcile the bill with agreed charges and effective dates. When comparing quotes, use the full cost, including separately billed items.
Start with my electricity bill →National Grid’s guidance describes an existing exceptional-circumstances route where a change in how a site is used results in a significant capacity change. For that route, the change must be greater than 50% of the capacity used to set the band, with supporting evidence and the other Schedule 32 requirements satisfied.
A kVA reduction alone is not enough. Other routes include a change in connection voltage or a successful banding dispute. These existing rules are separate from DCP412. Check the band review criteria ↗
Low usage.
Inherited meter.
Could CoMC be relevant?
If your premises no longer need the previous occupier’s meter setup, a Change of Measurement Class (CoMC) or wider meter-arrangement review may be worth exploring.
This is separate from DCP412. Check demand, installed equipment, the process available and any one-off costs before assessing the benefit.
With Market-wide Half-Hourly Settlement expanding, CoMC should not be presented as a guaranteed permanent return to non-half-hourly settlement or a way to remove every fixed charge.
A bill starts
the conversation.
Data informs the decision.
A capacity reduction should leave your business with the power it needs to operate.
National Grid advises considering long-term requirements before reducing capacity. Released capacity can be used by others, so increasing it later may involve costs. Read its capacity guidance ↗
Compare demand across a representative period
Consider busy periods, seasonality and current operations. A quiet month cannot establish the right capacity for the whole year.
Allow for future plans
Tell us about new machinery, EV chargers, heating changes or expansion before any recommendation.
Identify each saving separately
Capacity, banding and metering changes need their own evidence, effective dates and cost assessment. Some fixed charges may remain appropriate.
Already in a contract?
A capacity review does not inherently require a supplier switch. We can investigate the current position while your existing contract continues.
Let’s make sense
of your fixed costs.
Start with your bill and what has changed at the premises. We’ll help identify whether capacity, banding, the meter setup or the contract needs a closer look.
- 1
Tell us what you’re seeing. High standing charges, lower demand or an inherited meter.
- 2
We establish the current position. A bill helps. Demand and technical evidence may follow.
- 3
You see the options. Any proposed change and its costs explained before you decide.
Our kVA capacity review and CoMC service explain the individual routes.
Thank you. We have your request.
Smart Energy will review your enquiry and get back to you. We may ask for further supply or demand information.
- Review requested
- Business
Good questions.
Clear answers.
Has Ofgem approved lower business standing charges?
Does low electricity usage mean my kVA is too high?
Can a smaller business change its half-hourly meter arrangement?
Will reducing capacity automatically reduce my TCR band?
Can I have a review while I’m still in contract?
What should I send to start a review?
Can I respond to the DCP412 consultation?
Sources & checking dates
Checked 20 October 2026. DCP412 remains under consultation. This article explains review routes; eligibility and outcomes depend on the site and current rules.
