Charging arrangements

We have responsibility for ensuring that the Distribution Network Operators (DNOs) charge customers in an appropriate way for connecting to, and using, the electricity distribution networks.

This area sets out information about our policy, including the structure of charges project, and documents on policy work conducted thereafter.  We do not approve the charges themselves, but the methodologies used to calculate them.

We are carrying out two charging projects for both electricity distribution and transmission that aim to holistically review our approach to network charging.

The Targeted Charging Review (TCR): Significant Code Review (SCR) is an Ofgem-led project that was launched in August 2017. It assesses how residual network charges should be set and recovered in Great Britain for both electricity transmission and distribution networks. The TCR aims to address our concern that the current framework for residual network charges could lead to inefficient use of the network, leading to adverse impacts on consumers.

The electricity network access project, launched in November 2017 considers the reform of network access and forward looking element. We are focusing on options to define more explicitly arrangements for access to the networks and the options for improvement to the forward-looking elements of network charging.

The DNOs developed common approaches to connections charging and distribution use-of-system (DUoS) charging. These common approaches include:

  • from 1 April 2010, all customers connected at the lower voltages (all low voltage (LV) and most high voltage (HV)) have been charged DUoS under the Common Distribution Charging Methodology (CDCM)
  • from 1 April 2012, demand customers at the higher voltages (some HV and all extra-high voltage (EHV)) have been charged DUoS under the EHV Distribution Charging Methodology (EDCM)
  • from 1 April 2013, generation customers at the higher voltages have been charged DUoS under the EDCM
  • from 1 October 2010, the DNOs' connections methodologies have incorporated the Common Connections Charging Methodology (CCCM).

These common charging methodologies are set out in the Distribution Connection and Use of System Agreement (DCUSA) document. They can be modified through the DCUSA open governance process, in which we make the final decisions. We also make decisions on the form of the DNOs' charging statements.

The DNOs' charging statements can be found on the website of the Energy Networks Association. Charging issues are discussed by an industry group called the Distribution Charging Methodologies Development Group (DCMDG).

 

Publications and updates

  • Published: 11th Apr 2018
  • Decisions
  • 1 Associated documents
We are granting IDNOs a derogation from their charging methodology due to a Last Resort Supply Payment claim by Co-Operative Energy.

  • Published: 10th Apr 2018
  • Decisions
  • 1 Associated documents
We directed SSEN not to make a modification to its Statement of Methodology and Charges for Connection relating to flexible connections.

  • Published: 7th Feb 2018
  • Decisions
  • 1 Associated documents
We are granting DNOs a derogation from their charging methodology and notice period due to a Last Resort Supply Payment claim by Co-Operative Energy.

  • Published: 29th Jan 2018
  • Closed: 26th Feb 2018
  • Consultations and responses
  • 18 Associated documents
Recovery of costs incurred in operating ‘flexible connections’: consultation

  • Published: 21st Nov 2017
  • News and blogs
  • 0 Associated documents
Charging Futures Forum launched on 9 November 2017

  • Published: 1st Nov 2017
  • Decisions
  • 2 Associated documents
Derogation to allow Northern Powergrid (Yorkshire) to charge certain customers outside of its methodology to avoid double charging for the same assets.

  • Published: 3rd Mar 2017
  • Decisions
  • 3 Associated documents
Derogations to allow Western Power Distribution to charge customers incorrectly to mitigate customer detriment from an error in its calculation of charges.

  • Published: 6th Jul 2016
  • Decisions
  • 3 Associated documents
Ofgem’s decision to approve UK Power Distribution Limited’s proposed Use of System Charging Methodology and Use of System Charging Statement effective 1 July 2016.

  • Published: 11th Jan 2016
  • Decisions
  • 1 Associated documents
In December 2014 we consulted on whether the voltage rule should take precedence over the High Cost Cap when Distributed Generation connections trigger both rules. We considered stakeholders’ concerns before confirming our view.

  • Published: 17th Dec 2014
  • Closed: 25th Feb 2015
  • Consultations and responses, Open letters and correspondence
  • 16 Associated documents
This letter invites comments on our view, subject to consultation, for the voltage rule to take precedence over the High Cost Cap as we consider this position allows for more consistent treatment between different types of customers and a fairer...

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