In our recent decision on closing out the DPCR4 losses incentive mechanism, we indicated that we would consider applications from Distribution Network Operators in relation to any adverse impact or penalty as a result of the effect of the restatement of losses data or the anticipation of the residual losses incentive (PPL values) on allowed revenue under/over recovery positions. This is to prevent DNOs being unfairly penalised for the under/over recovery of revenue related to the Authority’s decisions not to activate the Distribution Losses Incentive Mechanism for DPCR5 and the decision on closing out the DPCR4 losses incentive mechanism.
Scottish Power Manweb plc (SPMW) have submitted an application to us requesting relief from the PRt value of zero for the affected Regulatory Year 2013/14. We are satisfied that, in relation to the losses incentive values, SPMW’s decision to under recover allowed revenue was justified. We are also satisfied that its treatment of the anticipated PPL values caused the PRt value with respect to the affected Regulatory Year 2013/14 to be zero. Without the PPL value, SPMW would have received a PRt value of 1.5 per cent.
Therefore, in relation to the losses incentive values, we are minded to provide SPMW with relief from the PRt of zero by directing a PRt value of 1.5 per cent with respect to the affected Regulatory Year 2013/14.
We are seeking stakeholders’ views on our minded-to position. Responses should be sent to Tom Mackenzie, Distribution Policy or emailed to thomas.mackenzie@ofgem.gov.uk by 10 February 2015.