Ratchet charges

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What are ratchet charges?

A ratchet is a commercial penalty charge applied to any daily gas meter which, during the winter period (October to May), exceeds its agreed Daily Capacity (DMSOQ). This commercial penalty deters parties from setting their daily capacity requirements below what is actually needed during the winter, when demand is at its highest. 

Ratchet season applies from 1 October to 31 May each year, in line with increased demand on the network over the winter period. Should large sites exceed their DMSOQ during this period, they will receive an ad hoc invoice separate to their usual monthly bill. Individual energy transporters apply the charge, and penalties vary depending on how much energy has been used above the contracted DMSOQ cap.

During the ratchet season, a site’s DMSOQ automatically increases when the energy limit is breached. This continues upwards each time daily gas use exceeds the DMSOQ until it reaches the Provisional Maximum Supply Point Capacity (PMSOQ).

Avoiding ratchet charges

By knowing your maximum daily gas limit, it's possible to monitor your usage to avoid exceeding the DMSOQ cap. However, if you find that you regularly use more energy than your limit permits, you can review your DMSOQs with your supplier. They should be able to provide you with the information needed to make an informed decision.

Once a request to increase DMSOQs is made, the supplier will send the request for approval from the network.This may provide greater flexibility and could help to avoid future ratcheting penalties.

If you receive a pre-ratchet notification and have reason the believe its incorrect, speak to your supplier as soon as possible to challenge it. The shipper is given five days from the date of the charge to investigate the consumption of the day in question, so it's important to contact them quickly. 

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