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.