Notice to modify the RIIO-ED1 PCFM with respect to SPMW Link Box cost allocation
Correspondence and other
Publication date
Industry sector
Distribution Network
In accordance with Charge Restriction Condition (CRC) 4A of the Electricity Distribution Licence, we are consulting on the following proposed modification to the ED1 Price Control Financial Model (PCFM):
Inclusion of allocation percentages within the “SPMW” sheet to allocate the £23.4m allowed expenditure in respect of Link Box Costs to “Non-load related capex – asset replacement” such that this amount is fed through to allowed revenue.
This modification to the ED1 PCFM follows the decision made by the Authority on 30 November 2017 to modify Special Condition CRC 3F of the Electricity Distribution Licence to revise allowed expenditure for Link Box Costs.
Whilst the allowed expenditure of £23.4m was correctly reflected within the PCFM published on 30 November 2018, the allocation percentages required to feed this expenditure through the Model had not been updated. As such, the additional allowed expenditure was not recognised in SPMW’s allowed revenue.
This modification that we are now making to the ED1 PCFM will enable the revised allowed expenditure for Link Box Costs to feed through to SPMW’s allowed revenue.
Please respond to this proposed modification no later than 04 September 2019. We intend for this modification to be included within the Annual Iteration Process, due to conclude on 30 November 2019.