Decision to grant derogation to Northern Powergrid (Yorkshire) for use of system charges to extra high voltage customers affected by a methodological error

Publication date
1st November 2017
Information types
Policy areas

Distribution Network Operators (DNO)s recover their allowed revenue from customers through distribution use of system charges. The methodology for calculating these charges for the large, industrial customers connected at the highest voltages is the Extra High Voltage Distribution Charging Methodology (EDCM).

In a letter dated 13 October 2017, Northern Powergrid (NPg) set out the background to an apparent error in the logic of the EDCM under particular circumstances relating to customers connected to a smaller network (known as an LDNO) within NPg (Yorkshire). In this specific case, the correct application of the EDCM would result in an illogical outcome - where the LDNO would be charged twice for some assets.

To avoid this double-charging outcome, so that assets are only charged on a sole use basis, NPg has requested a derogation to price outside of the EDCM, specifically to address this issue. This letter gives consent for the requested derogation.

Alongside the letter giving consent to the derogation, we have published NPg’s request for the derogation.