Charging arrangements

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.

From 2013 LDZ charges will be set by the GDNs on 1 April each year. Indicative charges will be published five months in advance (1 November) and actual charges will be 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.

General issues relating to GDN charging arrangements, including charging volatility or structure of charges issues, can be found on this page.

Modifications to the GDNs charging methodologies or charging statements are detailed on our modifications to charging methodologies page.    

Publications and updates

  • Published: 13th Apr 2017
  • Decisions
  • 1 Associated documents
See our decision to change the accuracy requirement of Ofgem approved Calorific Value Determining Devices.

  • Published: 23rd Nov 2016
  • Closed: 6th Jan 2017
  • Consultations and responses
  • 11 Associated documents
Open letter published today on a proposal to relax the accuracy requirements for Ofgem-approved Calorific Value Determining Devices.

  • Published: 26th May 2016
  • Decisions
  • 1 Associated documents
This letter explains our decision not to veto changes to Scotia Gas Networks Connection Charging Methodology Statements for the Scotland and Southern gas distribution networks.

  • Published: 14th Mar 2016
  • Decisions
  • 1 Associated documents
We have decided not to veto changes to Wales & West Utilities Connection Charging Methodology Statement.

  • Published: 10th Mar 2016
  • Open letters and correspondence
  • 1 Associated documents
This letter is Ofgem’s response to the Energy Networks Association letter dated 23 September 2015 regarding their consultation on Reducing Costs and Removing Barriers for Low Flow Entry Sites.

  • Published: 3rd Feb 2016
  • Decisions
  • 1 Associated documents
This letter explains our decision not to veto changes to National Grid Gas Distribution’s connection charging methodology statement.

  • Published: 21st Jan 2016
  • Decisions
  • 1 Associated documents
This letter explains our decision not to veto changes to Northern Gas Network’s connection charging methodology statement.

  • Published: 2nd Sep 2014
  • Other
  • 3 Associated documents
On 12 May 2014, we consulted on National Grid’s proposal to change the conditions when an Advanced Reservation Capacity Agreement (ARCA) is required. After reviewing the responses to our consultation, this is our assessment of the modification.

  • Published: 21st Aug 2014
  • Open letters and correspondence
  • 2 Associated documents
This letter summarises the report’s findings and our conclusions that the prescribed method for converting metered volumes of gas into thermal energy remains appropriate and we should adopt more flexible technical standards for CV determination devices...

  • Published: 14th Aug 2014
  • Closed: 31st Oct 2014
  • Consultations and responses
  • 22 Associated documents
As part of RIIO-GD1 Final Proposals, we said that we would review the Fuel Poor Network Extension Scheme during the price control period, to take account of number of developments in recent years in how fuel poverty is being tackled.

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