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: 28th Sep 2009
  • Open letters and correspondence
  • 1 Associated documents
Letter highlights the DNOs' responses to our 4 Aug letter concerning communicating the impact on charges of new electricity distribution price control review.

  • Published: 25th Sep 2009
  • Reports and plans
  • 15 Associated documents
Electricity Distribution Network Operator's formal submission of a common charging methodology (CDCM) for their use of system charges at lower voltages.

  • Published: 4th Aug 2009
  • Open letters and correspondence
  • 1 Associated documents
This letter flags that the combination of the new electricity distribution price control review and proposed new charging arrangements are likely to have significant impact on the level of charges faced by different customer groups from 1 April 2010.

  • Published: 31st Jul 2009
  • Decisions
  • 4 Associated documents
This paper details our decision for delivering the structure of charges project at EHV and for governance arrangements. We propose licence conditions for a common method at higher voltages (EHV) from 1 April 2011 and for common governance arrangements.

  • Published: 2nd Jul 2009
  • 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 high voltage and low voltage. Their consultation closes on 10 July.

  • Published: 8th May 2009
  • Decisions
  • 1 Associated documents
This statutory consultation seeks views and representations in relation to our proposals at HV/LV for delivering the structure of charges project.

  • Published: 20th Mar 2009
  • Decisions
  • 1 Associated documents
This paper details our decision for delivering the structure of charges project. We propose licence conditions for a common method and governance at lower voltage levels from April 2010. At EHV DNOs can choose between two charging models from April 2011.

  • Published: 18th Dec 2008
  • Decisions
  • 1 Associated documents
decision letter on 3 month notice period for publishing IDNO charges

  • Published: 11th Dec 2008
  • Closed: 22nd Jan 2009
  • Consultations and responses
  • 19 Associated documents
Our licence proposal to require the DNOs to introduce a common cost reflective charging methodology and governance arrangements by 1 April 2010 was unsuccessful. We seek views on whether we should refer the matter to the Competition Commission.

  • Published: 3rd Nov 2008
  • Closed: 15th Dec 2008
  • Consultations and responses
  • 10 Associated documents
This document asks for a view on the obligation on IDNOs to provide three months notice, of use of system charge changes if appropriate.

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