Structure of charges update: consultation responses

1. Structure of charges update: consultation responses Presentation to the electricity DCMF 5 February 2009

2. Update • Our December consultation asked for views on the next steps for the project, and whether industry is supportive of Ofgem prioritising its resources on this project • We met bilaterally with stakeholders who requested a meeting in December / January • Consultation closed 22 January • Intend to raise at the February meeting of the Authority • Through the consultation period DNOs have made progress voluntarily on common HV/LV charging arrangements for 2010 • We have been attending work stream meetings • We met with DNOs on HV/LV issues on 16 January and wrote to them on 22 January with initial thoughts on the issues raised • During the consultation period SP and SSE published an industry “briefing” paper saying work would stop on HV/LV issues if we referred the project to the CC now

3. Consultation responses • There was some support foran immediate CC referral. A number of response advocated more time be given for the industry to resolve the matter itself • A number of responses stated a CC referral may be necessary to resolve EHV issues • Overall, consultation responses were strongly in favour of ‘banking’ HV/LV progress via a licence modification. The main benefits were perceived to be at HV/LV. • These responses generally suggested allowing the industry more time to consider EHV arrangements • Some responses said refer to CC after a period of time if the industry cannot resolve EHV issue itself • Some DNOs questioned whether an HV/LV CLM is necessary, others said it would be appropriate