Decision to grant derogations to Western Power Distribution for distribution use of system charges in 2017/18 and 2019/20
Decision
Publication date
Industry sector
- Supply and Retail Market
- Distribution Network
- Transmission Network
Distribution Network Operators (DNOs) recover their allowed revenue from customers through distribution use of system (DUoS) charges. The methodologies for calculating these charges are the Extra High Voltage Distribution Charging Methodology (EDCM) for the large, industrial customers connected at the highest voltages, and the Common Distribution Charging Methodology (CDCM) for the remaining customers.
In a letter dated 16 February 2017, Western Power Distribution (WPD) set out the background to an error in the application of the charging methodologies for two of its licence areas for 2017/18, and proposed an approach to correcting the error. WPD sought the most appropriate way to correct the error, proposing that for some EDCM customers it would issue an addendum to correct tariffs for 2017/18 and for the remaining affected customers, it would manually correct the tariffs for 2019/20.
Owing to the consequences of the error, WPD requested four derogations for each licence area. This letter gives consent for the four requested derogations.
Alongside the letter giving consent to the derogations, we have published WPD’s final, consolidated request for the derogations. We have also published a follow-up letter to WPD expressing our disappointment at the error and its consequences, and more details on how we reached our decision to issue the derogations.