Network charging and access reform

Electricity distribution

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.

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.

Through the Targeted Charging Review (TCR): Significant Code Review (SCR) we are assessing 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.

Through the electricity network access project, focusing on options to define more explicitly the arrangements for access to the networks and the options for improvement to the forward-looking elements of network charging.

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

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).

You can read decisions and other ongoing publications relating to electricity distribution licence holders in our:

You can read decisions relating to the relevant code in our Industry codes publications area.

Gas distribution

Gas Distribution Network (GDN) charges, known as Local Distribution Zone (LDZ) charges, are levied by GDN operators in order to recover their regulated allowed revenue as determined through the price control.

LDZ charges are paid by gas shippers on behalf of GDN customers, and make up approximately 80 per cent of Britain’s total gas network charges.

Since 2013 LDZ charges have been set by the GDNs on 1 April each year. Indicative charges are published five months in advance (1 November) and actual charges are published two months in advance (1 February).

Under their Gas Transporter (GT) licences, the GDNs are required to develop and maintain use of system charging methodologies. These must explain to customers the principles of, and methods used to, calculate LDZ charges.

Furthermore, the gas transporter licence requires that the methodologies achieve certain objectives, for example that charges are:

  • cost reflective
  • facilitate competition
  • reflect developments in gas distribution network businesses.

You can read decisions and other ongoing publications relating to gas distribution licence holders in our Licence and sectoral publications area.

You can read decisions on changes to the charging methodology in our Industry codes publications area.