Direction to correct minor formula errors in the ED1 PCFM for fast track licensees

Publication date
22nd April 2016
Information type
Policy area

Following the notice issues on the 22nd March 2016, Ofgem directs under Part B of Charge Restriction Condition 4A of the Electricity Distribution Licence a modification the ED1 Price Control Financial Model (PCFM). This modification corrects three minor formula errors for the four Western Power Distribution licensees, with full details set out in the attached notice.

Any impact of these changes will flow into the MOD value for Regulatory Year 2017/18, which will be directed by 31st November 2016. To preserve previously directed MOD values, the Year Selector has been moved forward one year. However, this results in erroneous calculations on the LiveResults tab. Users should refer to the SavedResults tab, which contains the model outputs following the Annual Iteration Process in November 2015 for all 14 licensees.

For ease of use, the attached model is a consolidated version of the PCFM that includes the calculation of base revenue for all 14 licensees, both those subject to the fast-track and slow-track settlements. Going forward we will continue to publish on this consolidated basis. However, we are not formally merging the models, as each of the 14 licensees retains their own legally distinct model.