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: 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...

  • Published: 11th Nov 2013
  • Decisions
  • 1 Associated documents
We have decided not to veto UKPN’s proposed modifications to its Connections Charging Methodology Statement (CCMS). This is a housekeeping modification to its CCMS to reflect the latest competition test decisions.

  • Published: 16th Aug 2013
  • Closed: 11th Oct 2013
  • Consultations and responses
  • 12 Associated documents
We are seeking views on the proposed changes to DCUSA which would add a new section to the National Terms of Connection (NTC).

  • Published: 12th Jun 2013
  • Decisions
  • 1 Associated documents
This letter provides a derogation for Scottish Electric Power Distribution in 2013/14

  • Published: 9th Apr 2013
  • Decisions
  • 2 Associated documents
This letter and supporting document give the reasons for decision to approve a charging statement for use of the private network at the Port of Leith.

  • Published: 20th Dec 2012
  • Closed: 23rd Jan 2013
  • Consultations and responses
  • 7 Associated documents
We are consulting on a two-year derogation for SEPD: it would not have to comply with its licence when setting DUoS charges for a specific customer. We are also seeking views on the treatment of certain CDCM customer types.

  • Published: 5th Dec 2012
  • Decisions
  • 6 Associated documents
This letter confirms that the DNOs have accepted the charging methodology for higher voltage distributed generation with condition, and have fulfilled it.

  • Published: 16th Nov 2012
  • Decisions
  • 1 Associated documents
This letter sets out our decision to approve the charging methodology for higher voltage distributed generation (the “EDCM for export”).