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: 9th May 2011
  • Closed: 17th Jun 2011
  • Consultations and responses
  • 15 Associated documents
Consultation on proposed guidance for funding reimbursements to pre-2005 DGs through DNOs' price controls.

  • Published: 13th Apr 2011
  • Reports and plans
  • 15 Associated documents
This is the electricity Distribution Network Operators' formal submission of an extra high voltage charging methodology (EDCM) for use of system charges to customers connected at higher voltages

  • Published: 1st Apr 2011
  • Reports and plans
  • 2 Associated documents
An interim report setting out DNOs' progress in reviewing the issue of generation dominated areas in relation to the Common Distribution Charging Methodology.

  • Published: 15th Mar 2011
  • Closed: 26th Apr 2011
  • Consultations and responses
  • 1 Associated documents
This consultation seeks views on a proposal to clarify the licence definitions of ‘Designated Properties’ and ‘Designated EHV Properties’ for the purpose of determining the applicable charging methodology for Licensed Distribution Network Operators

  • Published: 7th Jan 2011
  • Consultations and responses
  • 1 Associated documents
This letter highlights the electricity Distribution Network Operators’ current consultation on a common charging methodology for their use of system charges at the extra high voltage level. Their consultation closes on 1 February 2011.

  • Published: 16th Dec 2010
  • Decisions
  • 1 Associated documents
The document sets out Ofgem’s direction on tidying up certain licence conditions in relation to the delivery dates and the distribution charging boundary between higher and lower voltages.

  • Published: 14th Dec 2010
  • Decisions
  • 1 Associated documents
In our CDCM decision, we set the DNOs 5 conditions. One was to review their charging arrangements in relation to generation dominated areas. We have decided to extend the timeframe within which DNOs must secure compliance with the condition.

  • Published: 17th Nov 2010
  • Closed: 15th Dec 2010
  • Consultations and responses
  • 8 Associated documents
Decision and proposals on licence conditions in relation to the EDCM delivery dates and the distribution charging boundary between higher and lower voltages.

  • Published: 12th Oct 2010
  • Reports and plans
  • 2 Associated documents
A report to the Authority from the ENA on behalf of all DNOs on the need to tackle generation dominated areas in the CDCM.

  • Published: 30th Sep 2010
  • Decisions
  • 1 Associated documents
This derogation outlines our decision to allow Distribution Network Operators to defer submission of the EDCM.

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