An Important Notice To All Eon Half-Hourly Customers

Eon half-hourly customers are advised that they will be in receipt of additional invoices between January and February 2018. Eon will be sending you a letter directly in this regard, but we thought we’d let you know in advance so you know what to expect, who will be affected and how.

What is BSUoS and Black Start, why will you receive an additional invoice, and how much will it be? The Balancing Services Use of System (BSUoS) recovers the cost of day-to- day operation of the transmission system, which is calculated as a flat tariff across all suppliers and generators. National Grid are tasked with ensuring that the frequency of electricity going into the transmission system (one of which is called Black Start) is optimised.

Black Start is the process employed by the National Grid to quickly and effectively restore power after a blackout. Each year, Ofgem and the National Grid set targets for this service. This year, this target has been exceeded by £94.88 million – a cost that has now become the responsibility of suppliers. Eon absorbed this cost for the first 55% excess, but will have to claim the remainder from its clients. They are authorised to do so by virtue of Section 6.3(a) of their terms and conditions.

Customers on fixed term contracts concluded before 23 September 2016 (this being the date National Grid announced their intention to recover costs in this regard) can expect to receive an additional invoice, rather than an adjustment to their existing invoices. Additional costs will apply to consumption between April 2016 and March 2017.

The impact for most clients will be minimal. The additional Black Start cost will be calculated at a rate of 0.016/kWh and users of 0 –350 000 kWh will be in the region of an estimated £22. Customers can expect to receive their invoices between 12 January and 26 February 2018.

What is EII, why will you receive an additional invoice, and how much will it be?

Eon will also be notifying potentially impacted customers about Energy Intensive Industry (EII) charges. This change is attributable to Government’s exemption of up to 85% of costs supporting renewable energy for Energy Intensive Industries. The reduction for EIIs means charges for non-EIIs will increase. This legislation was expected to come into effect on 1 January 2018. In light of some delays in the full policy implementation, Eon are forewarning their customers of potential cost alterations.

The actual cost of this will depend on the implementation date, your contract term, and the settled cost for the proposed Renewables Obligation, Contracts for Difference, and Feed-in Tariff exemptions. However, the current view from Eon predicts medium-sized customers can anticipate an estimated £198 charge in 2018, £284 charge in 2019, and £314 charge in 2020.

Eon does its best to protect its customers from increases wherever possible – particularly in the case of changes in the industry and to legislation – and does not charge additional fees to its clients where there has been a forecasting error. They have absorbed some of the Black Start costs themselves to act as a buffer for their clients. However, in these cases, these additional charges are unavoidable and in line with Eon’s terms and conditions.

Please do not hesitate to contact us in respect of these additional charges. Your account manager will happily talk you through any queries or questions you may have and we will notify you of any updates as they happen.

 

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