Approval of statement pursuant to paragraph 6 of Special Condition 8C (Basis of transmission owner charges) of Scottish Hydro Electric Transmission plc’s electricity transmission licence.
Correspondence and other
Publication date
Industry sector
Transmission Network
Company Secretary
Scottish Hydro Electric Transmission plc
Inveralmond House
200 Dunkeld Road
Perth
PH1 3AQ
Direct Dial: 0141 331 6014
Email: donald.smith@ofgem.gov.uk
Dear Company Secretary
Approval of statement pursuant to paragraph 6 of Special Condition 8C (Basis of transmission owner charges) of Scottish Hydro Electric Transmission plc’s electricity transmission licence.
This letter sets out the basis for our decision to approve changes to the charging statement for Scottish Hydro Electric Transmission plc (“SHE Transmission”).
Background
Under its electricity transmission licence (the “Licence”), SHE Transmission is required to have a statement, approved by us, setting out the basis upon which it will charge National Grid Electricity Transmission plc (“NGET”) for services provided. The services comprise:
- transmission owner (“TO”) services;
- connections to the licensee’s transmission system; and
- outage charges.
Pursuant to paragraph 5 of Special Condition (“SC”) 8C, SHE Transmission must, at least once in every year, make necessary revisions to the statement in order that the information set out in the statement shall continue to be accurate in all material respects. SHE Transmission submitted its revised Statement of the Basis of Transmission Owner Charges (“the Statement”)for approval by the Authority on 30 May 2013. We published the Statement on 7 June 2013 and invited wider views on the proposed revisions by 8 July 20131.
SHE Transmission’s proposed changes
The changes SHE Transmission propose comprise:
- the introduction of an additional pricing option for post 2005 connections;
- housekeeping changes, including changes to bring the statement into line with recent amendments to the Licence; and,
- minor changes to some indicative costs contained in appendix 1 of its Statement.
The new pricing option will allow NGET to offer customers the option of paying an indicative charge upfront which will then be adjusted to reflect actual costs incurred and any interest payments due – ie if the indicative charge is in excess of actual costs a repayment would be made to NGET (which they would pass on to the relevant customer) and vice-versa. This option is already available across the rest of GB, and has been developed via discussion between SHE Transmission and NGET.
The proposed changes to indicative charges principally relate to decreases in charges for connection assets, and decreases in charge-out rates. There are also changes to a small number of SHE Transmission’s application fees.
Response to consultation
We received no responses to our consultation.
Our views
We welcome the introduction of the new pricing option for post 2005 connections, in our view it will improve customer choice and add consistency to the charging arrangements across GB. However, we note that the new pricing option took over two years to develop. We encourage SHE Transmission to resolve similar matters more quickly in future.
We also continue to encourage all TOs to work together to develop greater consistency between their respective charging statements and to facilitate the timely and co-ordinated submission of charging statements to us each year.
Authority’s decision
We have considered whether the proposed changes contained in the Statement submitted by SHE Transmission are consistent with the requirements of SC 8C and SHE Transmission’s wider licence and statutory obligations. We have also had regard to our principal objective and general duties in considering the Statement. We are satisfied that approval of the changes to the Statement is consistent with these.
Pursuant to paragraph 6 of SC 8C, the Authority hereby approves the revisions contained in the Statement annexed to this letter.
Yours sincerely,
Geoffrey Randall
Head of Networks Policy – Electricity Transmission
Duly authorised on behalf of the Authority
1. See related links above