Distribution Use of System Charges: Tax Trigger Mechanism
Decision
Publication date
Industry sector
Distribution Network
DISTRIBUTION USE OF SYSTEM CHARGES: TAX TRIGGER MECHANISM
Direction issued by the Gas and Electricity Markets Authority pursuant to paragraph 3.4 of Charge Restriction Condition 3 (Restriction of distribution charges: use of system charges) (“CRC 3”) of each of the companies’ electricity distribution licence (the “licence”) to which this document is addressed.
To:
a. Northern Powergrid (Northeast) Limited
b. Northern Powergrid (Yorkshire) plc
c. Electricity North West Limited
d. Eastern Power Networks plc
e. London Power Networks plc
f. South Eastern Power Networks plc
g. Scottish Hydro Electric Power Distribution plc
h. Southern Electric Power Distribution plc
i. SP Distribution Limited
j. SP Manweb plc
k. Western Power Distribution (East Midlands) plc
l. Western Power Distribution (West Midlands) plc
m. Western Power Distribution (South West) plc
n. Western Power Distribution (South Wales) plc
WHEREAS
A. Pursuant to paragraph 3.4 of CRC 3, the Authority may direct, in respect of the Regulatory Year beginning on 1 April 2011 and any subsequent Regulatory Year, the value of the CTRAt term in paragraph 3.3 of CRC 3. This has been determined in accordance with the tax trigger mechanism referred to in the Authority’s decision document published on 7 December 2009 under reference number 147/09 (the “Decision”).
B. The commencement of the Finance Act 2013 constitutes a trigger for the purposes of the tax trigger mechanism in the Decision. The Authority has decided that the amount of the CTRAt term set out against the licensees name in the table below is a negative amount, except for SP Manweb plc where it is a positive amount. This is to be multiplied by the value of the PIADt term for each year. The effect is to reduce revenue, except for SP Manweb plc where it increases revenue.
C. This Direction takes effect on and from 12 September 2013.
NOW the Authority HEREBY DIRECTS that, in respect of the Regulatory Year beginning on 1 April 2014, the amount of the CTRAt term in CRC 3 set out against the licensees name in the table below is a negative amount. This is to be multiplied by the value of the PIADt term for each year. The effect is to reduce revenue, except where the amount is shown in parenthesis, when revenue is increased.
Regulatory year beginning 1 April 2014
Andy Burgess – Associate Partner, Transmission and Distribution Policy
Authorised by the Authority