What are agreed supply capacity charges on your business bill?

Agreed supply capacity is the import capacity reserved for your premises, usually recorded as Maximum Import Capacity in kilovolt-amperes. Capacity charges can form part of your electricity bill even when demand is lower. National Grid Electricity Distribution says capacity changes are limited to once per 12 months in its reduction process [S1]. Check your own network's terms. Checked October 2026.

Last checked 16 October 2026

What is agreed supply capacity, and where do you find it?

Agreed supply capacity describes the import capacity allocated to your premises under the connection arrangements. National Grid Electricity Distribution also uses Maximum Import Capacity (MIC) and Available Supply Capacity. It expresses the limit in kilovolt-amperes (kVA) [S1].

Your distribution network operator (DNO) manages the local electricity network. Start with your connection agreement, electricity bill and meter records. Ask the network to confirm the agreed figure if those documents disagree. UK Power Networks identifies MIC as the maximum power a property can draw from its network [S2].

Kilowatts (kW) measure real power, while kilowatt hours (kWh) measure energy over time. Do not substitute a yearly energy total for an instantaneous capacity limit. Read kVA, kW and power factor before comparing charger ratings with the agreement.

What are capacity charges, and how do you calculate them?

National Grid Electricity Distribution explains that capacity charges are network fees levied on your supplier. They may appear under Distribution Use of System (DUoS) on the bill [S1]. Ask your supplier to identify the precise tariff and billing unit rather than assuming a standing charge is the capacity charge.

Its published charging guide distinguishes capacity, exceeded-capacity, fixed and energy charges [S4]. For an arithmetic illustration, assume a capacity rate of 10 pence per kVA per day and a 30-day billing period. These are assumed inputs, not a current regional tariff.

At the same assumed rate, the difference between 150 kVA and 100 kVA is 50 × £0.10 × 30 = £150 for that period. That calculation does not establish that you can safely reduce capacity, nor that other bill elements fall. It excludes VAT and all other charges.

Recreate the calculation using the contracted rate, correct units and actual period. Ask for a written explanation if the result does not match the invoice. Keep the invoice and network tariff period together so changes in the rate are not mistaken for changes in your capacity.

What happens if your site exceeds its agreed capacity?

The network charging guide describes exceeded-capacity charges applied to the amount above the agreed limit [S4]. Do not assume a universal penalty or multiplier. Obtain the current tariff statement for your network area, connection type and billing period, then ask how your supplier passes those charges through.

Review the maximum demand record alongside the connection agreement. Ask your electrical designer to distinguish contractual headroom from the physical rating and condition of the installation. A bill cannot certify that switchgear or cabling is suitable for a proposed new load.

For chargers, ask what happens when charging overlaps with your existing busy period. Include kitchens, cooling, heating, production and other significant site loads in the assessment. See how much power your site has before committing to equipment.

Should you reduce unused capacity before installing chargers?

Assess future requirements before releasing headroom. National Grid Electricity Distribution says reduced capacity is released to its network and may be used by others. Increasing it later may therefore involve a charge [S1]. Check your own DNO’s process rather than treating that policy as universal.

As a practical review, give the assessor representative demand records, planned operating changes and proposed fleet charging times. Highlight seasonal peaks and any unoccupied period that makes recent demand unusually low. Ask for a written recommendation that states the demand assumptions and proposed operating limits.

Compare load management with a capacity change. Request a design showing how charging is controlled and what happens if monitoring or communications fail. UK Power Networks also describes constrained and ramped connection products [S5]; availability needs a specific network offer, not a sales assumption.

Will reducing capacity lower every network charge?

No. Capacity charges and residual fixed charges are different elements. National Grid Electricity Distribution explains that residual costs are recovered through fixed daily charges. Changing MIC does not automatically change a site’s residual charging band [S3].

Ask your supplier for the present charging group, band and the basis for allocating it. Request separate calculations for the capacity element and the residual element. If a band review is proposed, ask the network which eligibility criteria apply and what evidence it needs.

Avoid multiplying a capacity reduction by the whole standing charge. That combines charges with different calculation methods. Read half-hourly metering and DUoS when comparing an electricity quotation with your charging operating budget.

Who should pay capacity charges under a host agreement?

Ask the parties to allocate existing charges, any increase caused by the project and any separate supply. Record how the costs will be evidenced and reconciled. Have your solicitor check the proposed allocation in the site agreement; this is a contract question rather than a rule determined by the funding label.

For fully funded proposals, ask whether the host incurs any electricity-account costs. For part funded and self funded projects, include the allocated amount in the operating budget before comparing returns. Do not count a capacity charge both within an all-inclusive energy assumption and again as an extra cost.

What should you do next?

Gather your connection agreement, recent bills and demand records. Identify planned chargers and other future loads, then get matched with an installer that covers your area.

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