Revised electricity charges

BWML have reviewed the costs we incur in providing electricity and the charges we make to moorers when we resell this electricity onwards to them—BWML have always operated within the guidelines specified by Ofgem and the changes we are making have likewise been guided by their regulations.

We need to adjust our prices in two ways:

  1. Our charges for the unit rates need to change as we have under charged since our current supply contract came into effect in November 2015, and
  2. We will be introducing an annual service charge to reflect other fixed costs we incur in the supply of electricity to moorers.

Both these changes are outlined in more detail below.

Why the changes?

The electricity charges made to businesses (e.g. BWML) are composed of various elements as follows:

  1. KVA* availability charge—which reflects the maximum demand that the marina site will pull at any one time. The higher the capacity required, the higher the KVA and consequently the higher this portion of the charge.
  2. Maximum demand costs—where max agreed capacity is exceeded.
  3. Standing charge—normally charged per day.
  4. Units of electricity used by the business as a whole.
  5. Climate change levy—a mandatory charge of 0.0559p per kWh. BWML are not able to pass this on to moorers under current Ofgem rules.

*KVA stands for Kilo volt amps.

By better understanding the month to month consumption demands across every marina BWML have been able to remove element 2. by managing the KVA (maximum) site requirements within the new contract.

For quite some time BWML have only charged moorers the variable charge per unit—item 4. above, we now need to reflect the charges incurred under 1 and 3.

The revised unit charges will take effect from 1st April 2017 and the attached extract by marina shows the revised prices that moorers will pay.

How the new unit charge will be calculated

BWML will take into account the elements charged above for each marina over the 12 months’ electricity bills from January 2016 to December 2016 to calculate the unit price that is relevant.

The example below is how this will be done:

To set the unit charge for 1 April 2017 to 31 March 2018 we have looked at the most recent 12 month billing period available—January 2016 to December 2016.

The following example is based on an actual marina within BWML:

Sawley Marina

Current rate charged [r] 9.58p
Part 1 — aligning customer unit rate to that charged to BWML by supplier
Units used during 2016/17 (kWh) [a] 679,215
Cost of above units [b] £67,444
Actual cost per unit charged to BWML [c] 9.930p =b/a
Undercharge from BWML to customers plus 0.35p
Part 2 — inclusion of kVa availability charge (at applicable sites)
kVa Availability Charge [d] £1,977
kVa per unit 0.291p =c/a plus 0.29p
Part 3 — inflation from November 2017 when rates will next change*
Forecast unit cost [e] £68,186 =b+1.1%
Forecast kVa cost [f] £1,999 =d+1.1%
Inflation cost per unit 0.103p =(e+f)/a plus 0.10p
New rate charged 10.32p

*Note on inflation
We are forecasting that the rates that BWML are charged will increase by 2% when we enter into a new supply contract in November 2017. This 2% has been weighted based on units used across the year, resulting in an annual inflation adjustment of 1.1%.

BWML review electricity tariffs with industry brokers every two years to ensure that we are getting the best possible rates from suppliers. As with domestic household supplies BWML seek to fix their prices by tendering across several brokers – the current contract will be replaced in November 2017 and it is likely that we will secure a supply contract for a further 2 years, but it will be based on the best value prices that are available at the time and could be a 3 year deal we enter into.

Current indications are that electricity prices will increase going forward and therefore we are estimating a 2% uplift in prices charged from November 2017—we outline in the Q&A’s below how prices are reconciled on an annual basis under Ofgem rules.

As indicated above, the climate change levy is absorbed by BWML and by comparison with domestic supply costs to households generally the new charges to BWML moorers still represent very good value. Below is a summary of the proposed new unit rate per marina.

Summary of proposed unit recharge rate

Marina Current Rate Unit cost adj. Add in kVA Inflation New charge
Apsley 9.63p 0.06p 0.00p 0.10p 9.79p
Bath 10.58p -0.22p 0.00p 0.11p 10.46p
Cowroast 10.21p 0.25p 0.78p 0.11p 11.35p
Diglis Basin 9.89p 0.15p 0.00p 0.10p 10.14p
Galgate 10.68p 0.18p 0.00p 0.11p 10.97p
Glasson Basin 10.86p -0.08p 0.00p 0.11p 10.89p
Hull 9.68p 0.22p 0.20p 0.10p 10.20p
Kings 9.78p 0.15p 0.30p 0.10p 10.34p
Lemonroyd 9.58p 0.13p 0.15p 0.10p 9.96p
Limehouse Basin 9.34p 0.17p 0.45p 0.10p 10.06p
Packet Boat 9.84p 0.11p 0.47p 0.11p 10.52p
Poplar Dock 9.43p 0.16p 0.87p 0.11p 10.57p
Portavon 9.88p 0.13p 0.47p 0.11p 10.58p
Priory 9.80p 0.19p 0.36p 0.10p 10.45p
Ripon 9.72p 0.17p 0.21p 0.10p 10.21p
Sawley 9.58p 0.35p 0.29p 0.10p 10.32p
White Bear 10.01p 0.49p 0.00p 0.11p 10.60p
Whixall 10.53p 0.78p 0.36p 0.12p 11.78p

A selection of domestic charges are shown in the Q&As for comparison.

Introduction of an annual service charge

Ofgem guidelines allow the marina operator to set what is seen as a fair representation of their infrastructure and administration costs in supplying electricity to their customers. As you would expect this has many components from the installation of cabling and bollards, to servicing and replacement of meters.

The annual service charge has been set at £40 per year per customer account and will be payable from 1st May 2017.

All customers will receive an interim invoice covering the period 1st May 2017 up to the end of their current mooring contract, thereafter it will be an additional invoice at your renewal date.

NB—customers renewing on 1st May 2017 will first see the annual service charge alongside their renewal invoice.

We believe this annual service charge is very competitive when compared to many other marinas—see below Question and Answers for comparisons.

Please go through the below Question and Answers for more information to assist with the detail behind these changes.

We can assure BWML customers that we are committed to give good value for all our services—Ofgem sets regulations regarding the reselling of electricity for domestic consumption and we follow these very carefully. You may be interested to see the Ofgem regulations and they can be found on their website.

Your local marina manager will be happy to expand on any of the detail for your marina if necessary:

Get in touch

Question and Answers

Why are you adding these extra costs onto moorers now?

We entered into a 2-year supply deal in Nov 2015 and frankly had not focused on the cost discrepancy between what we were paying the provider and what we were charging our customers. We have to bring this into line though at the earliest opportunity and this is 1st April 2017 for the unit charges.

We had under estimated the costs of providing electricity across our 19 marinas and over the last 2–3 years we have invested heavily in bollard upgrades and payment systems across marinas. This investment continues going forward and therefore we have reviewed these costs and believe an annual charge of £40 per moorer is not only fair and relevant, but also extremely good value by comparison with other marinas.

This was introduced in isolation some years ago driven by the extent of investment at the time, this will change to the £40 being charged at all other marinas effective from 1st May 2017.

No—it’s more important that we are clear on the relevant charges going forward from April 2017 which is why we have taken our time to assess what is appropriate to charge.

The charges that BWML are introducing compare very well with other marina operators, in fact there are some who are charging more for this service. Examples are below:

  • MDL Marinas £40.00
  • Bristol Marina £61.80
  • Mercia marina £65.00
  • Debdale Wharf £72.00
  • South Dock Marina
    • 16amp £68.52
    • 32amp £79.32

Source: Websites of each marina, February 2017

Ofgem sets out very clear principles where electricity is ‘resold’ for domestic consumption—which is what BWML is doing when it supplies moorers.

  1. Electricity must be charged (to moorers) at the same price it is bought from the supplier. The green levy which we pay cannot be included in the charge to moorers—so this is a cost that BWML has to absorb.
  2. Costs of supplying electricity can be charged where justified and reasonable within a service charge – costs such as Invoicing; Admin; Maintenance of bollards; costs of providing new bollards and running costs of supply are all costs that can be included in the annual service charge. The Ofgem website outlines these regulations in more detail on their website.

Yes, absolutely; in the table above we have summarised kWh charges for each marina location. The costs included within the service charge of £40 per year are available above also.

The kWh (per unit) charges will change on or shortly after 1st April 2017. As you would appreciate there is a lot of manual work to do at most marinas to update bollards or payment machines etc.

Where electricity use is invoiced directly to customers—the invoice will show a different rate applying from 1st April. The service charge will be invoiced for the part year remaining on any mooring contract which expires/renews after 1st May 2017, and at the next annual renewal (on or after 1st May) the service charge will be invoiced separately for the full year following.

So to give some examples:

A May 1st 2017 renewal will receive an additional invoice for the £40 annual service charge for the year commencing 1st April 2017.

A June 1st renewal customer will see:

  • An invoice for the part year 1st May–31st May—effectively 1/12 of the £40.
  • Then with their annual renewal invoice for the year commencing 1st June 2017, there will be the addition of the annual electricity service charge of £40.

Regarding the unit costs (kWh)—we have a new contract starting in November 2017 (yet to be tendered) and we have assumed from industry insight that there is likely to be an increase to electricity charges at that time. In order to define costs which will run to the end March 2018, we have assumed a 2% increase into our unit rates. This has been built into the rates you will be charged from 1st April 2017.

Ofgem rules state that once final prices are known (for us within the new supply contract starting November 2017) then we are obliged to reconcile the rates we have assumed and if the customer is owed £5 or more we are to issue this to customers as a refund and if we are owed £5 or more this can be added onto the following years charges.

We will not know the likelihood of this balancing payment to or from customers until the new electricity contract rates are confirmed November 2017 onwards. We have been prudent therefore in building in a small rise in electricity costs (the 2%) and we will inform customers of price changes as soon as we know future supply rates.

Regarding the annual standing charge—we will recalculate this each year and where there is a material difference we will change this each year effective from 1st May.

It should be noted though that our running costs and investment in bollards is quite stable year to year—i.e. they don’t fluctuate greatly. Accordingly, we don’t envisage this service charge changing much each year, and as can be seen from Q5 above we are better value than many marina operators and would want to keep it that way going forward.

Sawley Marina region

Supplier Rate specified Price per kWh in Pence Annual standing charge Standing charge per day—pence
Extra Energy Variable v1 8.841 £210.02 57.54
Iresa 12 Month fixed Flex 4 11.445 £48.75 13.356
Scottish Power Online fixed Saver March 18 v3 11.501 £120.00 32.876
SSE 1-year fix v9 11.918 £84.01 23.016

Hemel Hempstead, Hertfordshire

Supplier Rate specified Price per kWh in Pence Annual standing charge Standing charge per day—pence
Extra Energy Variable v1 9.282 £210.02 57.54
Iresa 12 Month fixed Flex 4 11.445 £51.09 13.997
Scottish Power Online fixed Saver March 18 12.859 £70.02 19.184
Sainsbury’s energy Variable 12.201 £94.93 26.009
Eon Online fixed 1 year v7 13.125 £59.94 16.422
British Gas Home Energy fixed Mar 2019 13.734 £94.93 26.009

London (Docklands)

Supplier Rate specified Price per kWh in Pence Annual standing charge Standing charge per day—pence
SSE 1 year fixed v9 11.643 £84.01 23.016
Sainsbury’s energy Variable 12.558 £94.93 26.009
Octopus Energy 12 month fixed 12.579 £72.63 18.90
Eon Saver fixed 1 year v7 online 13.377 £59.94 16.422
SSE 2 year fixed 13.556 £54.00 14.795
First Utility Fixed March 2018 v7 online 13.648 £77.26 21.168
EDF Protected Feb 18 v2 15.005 £68.99 18.90

Source:, 14th Feb 2017

Calculation of Annual Service Charge

Infrastructure Expenditure (10 year life)
Provision and installation of bollards 241,921
Supply and installation of metering hardware and software 40,626
Electrical supply upgrades and works 162,764
Grand Total 445,311
Useful life (years) 10
Infrastructure cost per year 44,531 [A]
Annual running costs
Consumables (cards, tokens etc) 2,238
Support contracts for software 9,465
Maintenance and repairs 20,948
Administration 4,056
Annual running costs 36,706 [B]
Total annual costs of providing electricity [A] + [B] 81,238
Number of customers 1,988
Annual charge per customer (calculated) £40.86
BWML propose to charge customers from 1st May 2017 £40