New taxes on UK electric bills

Electricity Market Reform (EMR) Update

Posted: 06 Apr 2015 06:44 AM PDT

The British Government have set out new measures to ensure that the UK's future electricity supply is reliable and will meet targets to reduce carbon emissions whilst minimising the cost, to make it affordable for customers.

The charges associated with EMR are complicated and some suppliers may elect to pass through the costs of the EMR to their business energy customers. These charges took effect at the start of April and will appear on customers bills as of May.

EMR includes Contracts for Difference (CfD) and the Capacity Market (CM). Customers will first see charges relating to these regulatory changes on their bills after May.

Business Energy Customers that will be receiving these charges going forth should have been notified by now. Haven Power have stated that the charges they are supplying will not appear on customers' bills until June 2015, as they have delayed this by a month to ensure the enhancements to their billing systems are thoroughly reliable and extensively tested, ensuring that any problems experienced by customers are kept to a minimum.

The changes for Haven Power will be as follows:

HH Contracts

For HH contracts there will be four new lines on bills under 'Taxes, Levies and Other Statutory Obligations' and they will appear as follows:

CfD Operational Levy xxxxx.x at kWh at p per kWh £xx.xx
CfD Interim Rate Levy £00.00
(01/04/2015 - 30/06/2015)
CM Settlement Costs Instalment £00.00
CM Levy £00.00

The CfD Operational Levy covers the operational costs of administrating CfD and is charged at a pence per kWh basis as outlined above and will be reviewed by the relevant regulatory body on an annual basis.

The CfD Interim Rate Levy, CM Settlement Costs Instalments and CM Levy cover the other administration and operational components of CfD and CM. These charges will be subject to reconciliation though they are, at this point in time, set at zero (£0.00). Reconciliation will appear on bills as additional lines in due course.

NHH Contracts

For NHH contracts, there will be one new line on bills under 'Taxes, Levies and Other Statutory Obligations' and it will appear as follows:

EMR Levy xxxxx.x kWh at p per kWh £xx.xx

The EMR Levy is calculated as a pence per kWh rate that applies to your consumption and replaces the four lines that will appear on your HH bills representing the administration and operation costs associated with EMR legislation. The EMR Levy will not be reconciled and is designed to cover all CM and CfD costs, simplifying them into one line on bills.

The reformed electricity market will deliver the greener energy and reliable supplies that the country needs. It will transform the UK electricity sector to one in which low-carbon generation can compete with conventional, fossil-fuel generation - ensuring that Britain builds a cleaner, more sustainable energy mix.