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

  • Published: 22nd Sep 2010
  • Decisions
  • 1 Associated documents
Our decision on revised timelines in respect of work to deliver common methodologies and more cost reflective charges to customers at EHV levels.

  • Published: 27th Aug 2010
  • Decisions
  • 1 Associated documents
This derogation outlines our decision to allow DNOs to defer submission of the EDCM from 1 September 2010 to 1 February 2011.

  • Published: 26th Aug 2010
  • Decisions
  • 1 Associated documents
This document sets out Ofgem's direction to implement our decision on how to determine the distribution charging boundary between higher and lower voltages.

  • Published: 23rd Aug 2010
  • Closed: 26th Aug 2010
  • Consultations and responses
  • 34 Associated documents
This letter consults on a revised timeline in respect of work to deliver common methodologies and more cost reflective charges to customers at highest voltage.

  • Published: 23rd Aug 2010
  • Decisions
  • 1 Associated documents
Our decision that any compensation paid to pre-2005 distributed generators by DNOs should be unbundled from their UoS charging methodologies.

  • Published: 23rd Jul 2010
  • Closed: 20th Aug 2010
  • Consultations and responses
  • 8 Associated documents
Notice setting out our collective licence modification proposal on the electricity distribution charging boundary between higher and lower voltages.

  • Published: 22nd Jul 2010
  • Decisions
  • 1 Associated documents
This document sets out our decision on the electricity distribution charging boundary between higher (EDCM) and lower (CDCM) voltages.

  • Published: 21st Jul 2010
  • Closed: 1st Sep 2010
  • Consultations and responses
  • 27 Associated documents
This document consults on the issues raised by Distribution Network Operators' development of proposals for charging pre-2005 distributed generators.

  • Published: 1st Jul 2010
  • Agendas, minutes and presentations
  • 2 Associated documents
Our consultation on electricity distribution charging boundary between higher (EDCM) and lower (CDCM) voltages published on 15/6/10.

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