- Publication date
- 16th December 2014
- Information type
- Policy area
We are approving an expenditure allowance of £1,118 million (2013/14 prices) for SHE Transmission to build the Caithness Moray transmission project in the north-east of Scotland. This is £105 million less than SHE Transmission’s most recent cost estimate of £1,223 million. This decision on the Caithness Moray project follows our July decision on the need for the project, and our October consultation on the project assessment.
We will update SHE Transmission’s revenue allowance for the project in January next year. This will affect 2015/16 transmission charges and increase the annual electricity bill for domestic users by around £1. We are also reducing the threshold for reopeners for this project to 5% from 10% of the project costs. This reflects the composition of the project cost onshore/offshore, and the different risks associated with each part.
This letter further explains our decision and reasons.
To implement our decision we are consulting on modifying SHE Transmission’s electricity transmission licence. A notice under section 11A(2) of the Electricity Act 1989 and the proposed modifications have been published alongside this letter on our Caithness Moray page.