Daily metered gas
What is daily metered (DM) gas?
There are two settlement worlds in UK business gas. One is non-daily metered (NDM), where the bulk of UK businesses sit. The other is daily metered (DM), where the very largest gas users sit by mandate and a handful of mid-market sites sit by choice. Daily metered gas, almost always shortened to DM gas, is the settlement category used for sites above approximately 58.6 million kWh per year (the Class 1 AQ threshold). DM sites have automated daily meter readings, are settled to actual daily consumption, and use specialised metering equipment installed by the Meter Asset Manager. Bills look different to NDM bills. Costs are explicit rather than bundled. Contracts are more sophisticated. Everything from billing to risk management changes when a site moves into DM.
Daily-metered gas sits at the upper end of business gas consumption, typically alongside specialist meter installation work.
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For UK business gas customers, the DM line is where gas procurement stops being a simple price comparison exercise and starts looking like commodity trading. Understanding the boundary matters when you are evaluating a new site, planning a connection at the top of the size range, or comparing how the same operation would be billed at a different scale.
What daily metered settlement means
DM gas sites are settled to their actual daily consumption.
- Meter readings are taken automatically every day.
- The data flows to the shipper and supplier through industry data systems.
- Billing reflects actual daily consumption, not estimated monthly figures.
- Daily balancing applies. Shortfalls and surpluses against shipper nominations are settled at the imbalance price each day.
The contrast with non-daily metered (NDM) settlement is direct. NDM sites are billed against AQ-based estimates with occasional meter reads. DM sites are billed against measured daily reality.
When DM is mandatory
DM settlement is required by UK industry rules for any site classified Class 1 by AQ.
- Class 1 threshold. AQ above approximately 58.6 million kWh per year.
- This typically corresponds to a peak gas demand at or above 11.8 GWh per year of nameplate capacity.
- Examples. Large industrial sites (chemicals, cement, glass, steel), big district heating schemes, very large hospitals and university estates.
Sites at or above this threshold cannot opt out of DM. The metering, data, and settlement arrangements that come with it are all mandatory.
DM versus NDM
| Feature | DM | NDM |
|---|---|---|
| Settlement basis | Actual daily consumption | AQ-based estimate, occasional actual reads |
| Mandatory at | AQ above 58.6m kWh/year | Below 58.6m kWh/year |
| Data collection | Automated daily | Meter reader visits, smart meter, customer reads |
| Imbalance exposure | Direct daily exposure | Absorbed into NDM settlement pool |
| Bill complexity | High. Many components shown explicitly | Lower. Most components bundled |
| Contracts available | Pass-through, flex, indexed | Mostly fixed, some pass-through |
Equipment required for DM
DM gas needs more sophisticated metering than NDM.
- Turbine or rotary meter. Suitable for high flow rates. Diaphragm meters are not.
- Pressure correction. The meter records corrected cubic metres rather than raw volume.
- Data logger. Reads the meter every day and stores values until they are pulled by the data flow.
- Communications. Modem, SIM card, or wired data link to push data through to industry systems.
The Meter Asset Manager (MAM) is responsible for installing and maintaining all of this. The customer can contract MAM service directly or through the supplier.
How DM data flows
- The meter records consumption continuously, with daily values stored in the data logger.
- The logger transmits daily values automatically (typically overnight).
- The shipper’s data services pick up the daily values.
- The shipper nominates daily volumes against the data.
- The transporter and Xoserve settle daily imbalances.
- The supplier bills the customer based on actual daily consumption.
The whole cycle completes daily. There is no AQ-based estimation in the bill, and no catch-up bills caused by AQ drift.
How DM affects the bill
DM gas bills tend to look very different to NDM bills.
- Commodity charge. Daily gas volume times the contracted unit rate (or pass-through wholesale price for that day).
- Transportation charges. Itemised by LDZ entry capacity, exit capacity, and commodity.
- Capacity charges. Based on the SOQ (Supply Offtake Quantity) at the site.
- Imbalance charges. Where applicable, settled to the daily cash-out price.
- CCL. kWh times CCL rate, identical to NDM.
- Operations charges. MAM, data services, and other operational costs are explicit on the bill.
The bill is more complex to validate. The opportunities to find errors and optimise costs are correspondingly larger.
Example DM bill structure
To give a sense of what a DM bill actually looks like, here is an illustrative structure for a large hospital with an AQ of 75 million kWh per year on a pass-through contract.
| Line item | Calculation basis | Illustrative monthly value |
|---|---|---|
| Commodity (wholesale gas) | Daily kWh consumed times daily wholesale price | £360,000 |
| Supplier margin | Fixed amount per kWh | £20,000 |
| Transportation. Entry capacity | Fixed monthly amount based on shipper nomination | £9,000 |
| Transportation. Exit capacity | Fixed monthly amount based on SOQ | £14,000 |
| Transportation. Commodity | kWh consumed times LDZ rate | £28,000 |
| Imbalance charges | Daily variation versus nominations at cash-out price | £1,800 |
| CCL | kWh times current CCL rate | £4,800 |
| MAM and data services | Annual amount divided by 12 | £1,200 |
| Subtotal before VAT | £438,800 |
Example only. Actual DM bill structures vary by supplier, contract type, LDZ, and operational arrangements. The point is the principle. DM bills itemise the components that NDM bills bundle into a single unit rate.
The advantage of the itemised structure is that every cost is visible. Wholesale price moves show up directly. LDZ transportation rate changes are obvious. Imbalance exposure can be analysed and managed. The cost is the complexity of validating the bill, which usually requires either specialised software or a dedicated commercial team.
Contract types available on DM
DM sites can access a wider range of gas procurement structures than NDM.
- Fixed flat. Single unit rate, simple. Less common on DM than NDM.
- Pass-through. Wholesale prices and network charges passed through at actual cost, with a supplier margin on top.
- Indexed. Unit rate tied to a wholesale index (NBP day-ahead, monthly, season-ahead).
- Flexible. Buyer takes positions on the wholesale market through the supplier across the year.
- Block and index. A portion bought as fixed blocks, the rest indexed.
The choice depends on the customer’s tolerance for price exposure, the operational stability of consumption, and the procurement capability available in-house or through a broker.
Operational management of a DM site
Running a DM site well requires more attention than NDM. The typical setup involves.
- A named energy manager or finance director responsible for the gas contract.
- Daily review of consumption data through the supplier portal or an energy management system.
- Monthly bill validation against the contract, with focus on imbalance charges, capacity allocation, and pass-through accuracy.
- Annual review of SOQ to make sure the booked capacity matches actual peak demand.
- Active hedging or position management through the supplier under flex contracts.
- A broker, consultant, or specialist procurement function involved in renewal and rate negotiations.
The combination of administrative discipline and procurement sophistication separates DM sites that get value from the structure from DM sites that pay for the complexity without realising the upside.
When voluntary DM is worth it
For sites below the mandatory threshold, voluntary DM can be worth considering when one or more of the following apply.
- Total gas spend is large enough that small percentage improvements in procurement matter.
- The site has significant daily variability that pass-through pricing could exploit.
- The procurement team or broker has the capability to manage flex or indexed contracts.
- The customer wants explicit transparency into all bill components.
For typical mid-market UK businesses, NDM remains the right answer. Voluntary DM is mostly used by large hotels and care groups, multi-site manufacturers, district heating schemes, and similar.
Related entries. Annual Quantity (AQ), MPRN, Local Distribution Zone (LDZ), Meter Asset Manager (MAM), Xoserve, non-daily metered gas, bill validation.
For the volume-to-energy multiplier that sits inside every DM bill calculation, see the gas conversion factor.
Frequently asked questions
What is daily metered (DM) gas?
A UK gas settlement category for sites with AQ above approximately 58.6 million kWh per year (Class 1) and for sites that have voluntarily moved to DM. DM sites have automated daily meter readings, are settled to actual daily consumption, and use specialised metering equipment.
When is DM gas mandatory?
When AQ exceeds approximately 58.6 million kWh per year (Class 1 threshold). Sites at or above this size cannot opt out of DM settlement.
What is the difference between DM and NDM gas?
DM sites are settled to actual daily consumption with automated daily reads. NDM sites are settled based on AQ-derived estimates with occasional actual reads. DM bills are more complex but more accurate; NDM bills are simpler but rely on estimation.
What equipment does a DM gas site need?
A turbine or rotary meter rated for the flow, pressure correction equipment, a data logger that stores daily values, and communications hardware (modem, SIM, or wired link). The Meter Asset Manager (MAM) installs and maintains all of this.
How is DM gas data collected?
Automatically. The meter records continuously, the data logger transmits daily values overnight, and shipper data services pick them up for settlement. No engineer visits and no AQ-based estimation are used.
Why are DM gas bills more complex than NDM?
DM bills itemise the components (transportation entry and exit capacity, commodity, imbalance, operations) that NDM bills bundle into the unit rate. More line items means more validation work and more places to find optimisation opportunities.
Can I switch supplier on a DM site?
Yes. DM switches typically take 6 to 12 weeks because of additional industry data flow steps and contract complexity. The metering equipment stays in place; the contract changes.
What contract structures are available on DM?
Fixed flat, pass-through, indexed, flexible, and block-and-index. The right choice depends on tolerance for price exposure, the operational stability of consumption, and the procurement capability available to the customer.
Is it worth moving a site below the threshold onto DM voluntarily?
For most mid-market UK businesses, no. NDM remains simpler and cheaper to administer. Voluntary DM is worth considering for sites with large gas spend, significant daily variability, and the procurement capability to manage flex or indexed contracts.
Does DM apply to electricity?
The equivalent on electricity is half-hourly metering (HH). HH electricity supplies are settled to actual half-hourly consumption, much like DM gas is settled daily. The two categories play similar roles in their respective markets.
How does AQ relate to DM?
AQ drives the classification. Above Class 1 (approximately 58.6 million kWh/year) DM is mandatory. Below Class 1 DM is voluntary. AQ also feeds into capacity and transportation charge calculations on DM sites.
Who pays the cost of DM metering equipment?
The MAM, contracted either by the supplier (with the cost bundled into the standing charge) or directly by the customer. Larger DM sites usually contract directly for better pricing.
How often do I need to validate a DM bill?
Monthly is the standard cadence. Bills are complex enough that a structured validation against the contract terms catches material errors and provides a feedback loop into the supplier relationship. Multi-month gaps in validation tend to produce surprises.
What admin function should be involved in a DM site?
A named energy manager or finance lead with authority to query bills, plus access to either internal procurement capability or a broker/consultant familiar with the contract type. The day-to-day work is light; the periodic interventions (renewals, AQ corrections, dispute resolution) need expertise.