The Gas Distribution policy team contributes to the regulation of monopoly networks by developing policies in relation to gas distribution in the UK. The main focus is on charging arrangements. The GDNs levy gas distribution charges on shippers, which account for circa 80% of the total gas transportation revenue. All GDNs are required to maintain a use of system charging methodology, which must explain to customers the principle of and methods used to calculate charges. Furthermore, the gas transporter licence has to ensure that these methodologies achieve certain objectives, for example that charges are:
- cost reflective;
- facilitate competition; and
- reflect developments in gas distribution.
In practice, this means that from time to time licensees should modify their charging methodologies to better meet their objectives. Any modification proposals Ofgem have received are published on this page as well as a table detailing the status of modification proposals that we have received. In addition, the policy team undertakes periodic review of the structure of charges to ensure that it provides appropriate incentives to GDNs, shippers, suppliers and consumers. The conclusion to the last review was published in February 2006. The policy team has also recently led work on the development of GDN interruption reform and introduction of GDN entry arrangements.
Gas Transportation Charges for each of the 8 Distribution Zones and the Transmission Network - link opens in a new browser window. Distribution charges are changed once a year on 1 October. Indicative charges are published 5 months in advance (1 May) and actual charges are published 2 months in advance (1 August). Transmission charges are changed twice a year on 1 April and 1 October.