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Residual Charging

Timelines for revision of Charging Bands and Allocation of sites to those bands

  1. OVERVIEW

  • There have been discussions held via the Distribution Charging Methodologies Development Group (DCMDG) about the approach to be taken with respect to the time period being used for the 24 months of data needed for the allocation of sites to charging bands in terms of the next round of banding ahead of the start of the next electricity transmission owner price control period. Agreement by the DNOs has been reached on what 24 month period is used. This alignment gives certainty to industry and customers alike and would prevent situations where say customers with multiple sites are or are not eligible for say a different band or to be considered (or not) for a reallocation due to a difference in the time period chosen as compared to a different outcome in a different area.
  • Please see below an outline of the processes involved, which is split into the two processes, being the review and determination of updated residual charging bands (i.e., the charging band thresholds) and the allocation of sites to those charging bands for the next transmission price control period.
  1. REVIEW & DETERMINATION OF RESIDUAL CHARGING BANDS

  • The below sets out the agreed timeline associated with the new charging bands for the purposes of DUoS charges that will apply from the commencement of the next onshore electricity transmission owner price control period.
  • The table below was created to assist in understanding the process used for the review and determination of updated residual charging bands as described in Paragraph 3 of Schedule 32. This sets out that the review of the charging band boundaries is to commence on or before 31 March in the Regulatory Year (t-3) three years prior to the commencement of the onshore electricity transmission owner price control period (t).
DNOs Set Tariffs

(with 15 months’ notice)

Charging Year Start Charging Year End Transmission Price Control Period t-(number of years)
31-Dec-19 01-Apr-21 31-Mar-22 ET2
31-Dec-20 01-Apr-22 31-Mar-23 ET2
31-Dec-21 01-Apr-23 31-Mar-24 ET2 t-3
31-Dec-22 01-Apr-24 31-Mar-25 ET2 t-2
31-Dec-23 01-Apr-25 31-Mar-26 ET2 t-1
31-Dec-24 01-Apr-26 31-Mar-27 ET3 t
31-Dec-25 01-Apr-27 31-Mar-28 ET3
31-Dec-26 01-Apr-28 31-Mar-29 ET3 t-3
31-Dec-27 01-Apr-29 31-Mar-30 ET3 t-2
31-Dec-28 01-Apr-30 31-Mar-31 ET3 t-1
31-Dec-29 01-Apr-31 31-Mar-32 ET4 t
  • The above shows that 31 March 2024 is the applicable 31 March in the Regulatory Year (t-3) three years prior to the commencement of the onshore electricity transmission owner price control period (t).
  • That means that as of but also prior to 31 March 2024 there are some processes that need to be carried out so as to complete the review of the charging band boundaries which leads into the process of allocation of sites to those bands which is dealt with under Paragraph 4 of Schedule 32. Those processes are set out below in the form of requirement number plus paragraph reference, date by which the requirement is to be fulfilled and the DCUSA text itself.
Requirement Date Process to be completed

1

(paragraph 3.1)

31‑Mar‑24

On or before 31 March in the Regulatory Year (t-3) three years prior to the commencement of the onshore electricity transmission owner price control period (t), each DNO/IDNO Party shall provide to the Banding Agent the following information (and shall take reasonable steps to ensure that such information is accurate):

(a)for each Final Demand Site within the groups identified in Paragraph 1.5 (a), 1.5 (b) or 1.5 (c), the Maximum Import Capacity used as the basis for the Use of System Charge billed by the DNO/IDNO Party in February of that Regulatory Year, which will be in respect of the Maximum Import Capacity held as at January in that Regulatory Year.

(b)for each Final Demand Site within the group identified in Paragraph 1.5 (d):

(i)if half hourly settled, a calculated estimate of the annual metered import consumption prior to February of that Regulatory Year; or

(ii)if non-half hourly settled, the Estimated Annual Consumption from the P0222 Report for the February of that Regulatory Year (or, if that is not available, the most recent Estimated Annual Consumption from an earlier P0222 Report).

2

(paragraph 3.2)

30‑Apr‑24

On or before 30 April following the 31 March referred to in Paragraph 3.1, the Banding Agent shall provide to each DNO/IDNO Party the boundaries for each charging band for each group of Final Demand Sites on the same basis as that set out in Paragraph 2.2.

3

(paragraph 3.5)

30‑Jun‑24

On or before 30 June following the 31 March referred to in Paragraph 3.1, each DNO/IDNO Party shall provide each Supplier Party with a list of each and every MPAN associated with a Non-Domestic Premises that is connected to the DNO/IDNO Party’s Distribution System, identifying the charging band to which each such MPAN has been allocated (in accordance with the allocation rules in Paragraph 4).
  • To produce the data to be given to the banding agent for 31 March 2024 which is used for creating banding thresholds (i.e., requirement 1), DNOs have agreed the following:
    • Requirement 1(a): To use the capacity data held at January for each site. (This is not 24 months average but data at January). This data will be available early February following HH billing.
    • Requirement 1(b)(i) For HH Measurement class G sites billed on a NHH aggregate basis, to use the data from 1st February 2023 to 31st January 2024. This data should be available by the end of February.
    • Requirement 1(b)(ii): For NHH P0222 data, to use February data. This data will be available mid-February.
  1. ALLOCATION OF SITES TO CHARGING BANDS

  • Whilst there are time frames associated with those requirements, there are no timeframes for allocation of sites into charging bands in Paragraph 4, both in terms of when this should occur nor what period of time the data should be taken from. However, paragraph 3.5 of Schedule 32 helps identify when the allocation of sites to charging bands will need to have been completed and thus it also points towards the 24 month period over which consumption or capacity data is to be averaged. Paragraph 3.5 states that by 30 June in the same year as the 31 March in year t-3, that DNOs/IDNOs need to have provided Suppliers with their list of each and every MPAN (associated with a Non-Domestic Premises that is connected to that DNO/IDNO Party’s Distribution System), with such a list identifying the charging band to which each such MPAN has been allocated (in accordance with Paragraph 4). It was noted that Paragraph 4 just states to use 24 months of data (if available) but not when that period should start and end.
Site Category Relevant text

Category 1 – EHV, HV and LV with MIC

(i.e., Designated Properties connected at EHV, HV and LV, with a Maximum Import Capacity as the basis for their current Use of System Charge)

4.1For Final Demand Sites within the groups identified in Paragraph 1.5(a), 1.5(b) or 1.5(c), each DNO/IDNO Party shall allocate its Final Demand Sites to the relevant charging band based on the following criteria (subject to Paragraph 4.2A):

    1. if 24 months of data is available, the average Maximum Import Capacity over that period; or if not available
    2. allocation to a charging band will be based on the following criteria:
      1. the average of Maximum Import Capacity over that period for which data is available; or
      2. if no such data is available, other available information that is appropriate for a typical profile of a similar site to best estimate the expected demand of the Final Demand Site.

Category 2 –LV with no MIC

(i.e., Designated Properties connected at LV, without a Maximum Import Capacity as the basis for their current Use of System Charges)

4.2For Final Demand Sites within the group identified in Paragraph 1.5 (d), each DNO/IDNO Party shall allocate its Final Demand Sites to the relevant charging band based on the following criteria (subject to Paragraph 4.2A):

    1. for a Final Demand Site that is half hourly settled:
      1. if 24 months of data is available, the average annual import consumption based on metered data over the 24 months; or if not available
      2. when a minimum of 12 months of data is available, the average annual import consumption over the period for which metered data is available; or if not available
      3. other available information that is appropriate for a typical profile of a similar site to best estimate the expected annual import consumption of the Final Demand Site.
    2. for a Final Demand Site that is non-half hourly settled:
      1. the most recent Estimated Annual Consumption for that Final Demand Site; or if not available
      2. the Default Estimated Annual Consumption for that class of Final Demand Site; or if not available
      3. other available information that is appropriate for a typical profile of a similar site to best estimate the expected annual import consumption of the Final Demand Site.
  • To allocate sites to residual charging bands and to produce the data to be given to Suppliers for 30 June 2024 which is in accordance with Paragraph 3.5 of Schedule 32, DNOs have agreed the following:
    • Category 1(a): To use the 24 month average capacity data from 1st May 2022 to 30th April 2024. This data will be available early May.
    • Category 2(a): For HH Measurement Class G sites billed on a NHH aggregate basis, to use the data from 1st May 2022 to 30th April 2024. This data should be available by the end of May.
    • Category 2(b): For NHH P0222 data, to use May data. This data will be available mid-May.
  • DNOs note that the above dates mean that they have at least a month from receiving the last bit of data to producing the final reports which they believe is achievable.