dnpc03 report ldz system charges capacity/commodity split and interruptible discounts

DNPC03 Report DNPC03 Report

LDZ System Charges LDZ System Charges Capacity/Commodity Capacity/Commodity

Split and Interruptible Split and Interruptible DiscountsDiscounts

Questions for Questions for ConsultationConsultation

1. Should the Charging Methodology be 1. Should the Charging Methodology be changed from 50/50 capacity/commodity changed from 50/50 capacity/commodity split to 95/5 split to 95/5

2. Should interruptible supply points pay 2. Should interruptible supply points pay 47.37% of the increased capacity charges47.37% of the increased capacity charges

3. Should the change be made with effect 3. Should the change be made with effect from 1 April 2008 or 1 October 2008from 1 April 2008 or 1 October 2008

1. Main Points Raised 1. Main Points Raised

Not enough information providedNot enough information provided Treatment of overhead costsTreatment of overhead costs Would encourage introduction of Would encourage introduction of

Standing ChargesStanding Charges Runs counter to energy efficiency Runs counter to energy efficiency

incentivesincentives AQ Review process may need revisedAQ Review process may need revised Retro-fit modellingRetro-fit modelling

2. Main Points Raised2. Main Points Raised

Discriminatory effectsDiscriminatory effects

SOQ dataSOQ data

Is the 47.37% cost reflectiveIs the 47.37% cost reflective


Derivation of the Derivation of the 47.37%47.37%

Existing Existing RegimeRegime

CapaciCapacityty

CommodCommodityity

TotalTotal

FirmFirm 5050 5050 100100

InterruptibleInterruptible 5050 5050

New RegimeNew Regime

FirmFirm 9595 55 100100

InterruptibleInterruptible 4545 55 5050


Align implementation date with end Align implementation date with end of the transitional arrangements, of the transitional arrangements, October 2011October 2011

Impact of October 2008 Impact of October 2008 implementation on price changesimplementation on price changes

Impact of Oct 2008 Impact of Oct 2008 implementation on price implementation on price

changeschangesFormula Year 2008/09Formula Year 2008/09

Charges based on Charges based on 50/5050/50

Charges based on Charges based on 95/595/5

Apr-Apr-SeptSept

Oct-Oct-MarMar

TotalTotal Apr-Apr-SeptSept

Oct-Oct-MarMar

TotalTotal

F’cast CollectedF’cast Collected 98.998.9 123.1123.1 222222 109109 113113 222222

F’cast AllowedF’cast Allowed 201201 201201

Percent Reduction Percent Reduction 17.0%17.0% 17.017.0%%

Charges based on 95/5 implemented Charges based on 95/5 implemented October 2008October 2008

F’cast CollectedF’cast Collected 98.998.9 113113 211211.9.9

Percent ReductionPercent Reduction 9.69.6%%

Final ProposalsFinal Proposals The Charging Methodology should be The Charging Methodology should be

changed so that capacity element the LDZ changed so that capacity element the LDZ system charges is set to recover 95% of the system charges is set to recover 95% of the revenue from the LDZ system charges and revenue from the LDZ system charges and the commodity element set to recover 5%.the commodity element set to recover 5%.

Interruptible supply points should pay Interruptible supply points should pay 47.37% of the increased LDZ capacity 47.37% of the increased LDZ capacity chargecharge

The change should be made with effect from The change should be made with effect from 1 October 20081 October 2008

Impact Impact Analysis Analysis West Midlands

BS SOQsBS SOQs Load Factor Load Factor Original Change SOQ Adj Change

Domestic 0-73.2 33.5% 33.5% -0.4% -0.2%

Firm 73.2 – 146.5 29.9% 29.9% 4.6% 4.9%

146.5 – 293.1 29.9% 29.9% 5.1% 5.4%

293.1 – 439.6 28.4% 28.4% 7.3% 7.6%

439.6 – 586.0 28.9% 28.9% 6.7% 7.0%

586.0 – 732.0 29.6% 29.6% 5.9% 6.2%

Firm 732 - 2198 30.3% 30.3% 4.1% 4.4%

2198 - 2931 34.9% 34.9% -0.6% -0.3%

2931 - 5861 35.7% 35.7% -0.9% -0.7%

Firm 5861 - 14654 32.0% 32.0% 4.2% 4.5%

14654 - 29307 48.0% 48.0% -11.3% -11.0%

29307 - 58614 42.9% 42.9% -5.8% -5.6%

58614 - 293071 54.3% 54.3% -14.5% -14.3%

293071 - 1465355 89.2% 89.2% -31.8% -31.6%

Interruptible 5861 - 14654 27.7% 45.8% 29.4% -13.1%

14654 - 29307 26.0% 39.2% 39.6% 0.5%

29307 - 58614 48.8% 54.4% -15.0% -21.8%

58614 - 293071 45.6% 64.5% -7.7% -30.2%

293071 - 1465355 42.1% 42.4% 1.6% 1.7%

Impact Impact Analysis Analysis North West

BS SOQsBS SOQs Load FactorRevised Load

Factors Original Change SOQ Adj Change

Domestic 0-73.2 37.2 -0,5 0.2

Firm 73.2 – 146.5 33.5 4.7 5.6

146.5 – 293.1 33.4 5.3 6.2

293.1 – 439.6 34.7 4.0 4.9

439.6 – 586.0 34.9 3.8 4.6

586.0 – 732.0 35.4 3.3 4.3

Firm 732 - 2198 34.6 3.2 4.2

2198 - 2931 39.1 -1.1 -0.1

2931 - 5861 40.6 -2.0 -1.1

Firm 5861 - 14654 45.4 -6.0 -5.1

14654 - 29307 51.5 -10.4 -9.6

29307 - 58614 46.7 -5.0 -4.1

58614 - 293071 56.2 -11.9 -11.1

293071 - 1465355 100.0 -32.9 -32.3

Interruptible 5861 - 14654 15.3 43.9 113.5 -6.1

14654 - 29307 29.5 39.3 31.3 4.6

29307 - 58614 46.8 60.0 -6.6 -25.1

58614 - 293071 37.9 61.9 12.4 -24.7

293071 - 1465355 53.0 58.1 -12.2 -18.4

Impact Impact Analysis Analysis London



Domestic 0-73.2 33.3 0.3 0.6

Firm 73.2 – 146.5 35.2 -0.1 0.2

146.5 – 293.1 35.1 0.0 0.4

293.1 – 439.6 33.6 1.8 2.1

439.6 – 586.0 34.3 1.0 1.4

586.0 – 732.0 34.3 1.0 1.3

Firm 732 - 2198 36.0 -2.0 -1.7

2198 - 2931 39.1 -4.4 -4.1

2931 - 5861 39.9 -4.7 -4.4

Firm 5861 - 14654 42.2 -6.6 -6.3

14654 - 29307 46.5 -9.6 -9.3

29307 - 58614 54.3 -14.8 -14.6

58614 - 293071 64.6 -20.8 -20.6

293071 - 1465355 84.9 -29.7 -29.5

Interruptible 5861 - 14654 24.3 45.3 43.9 -12.0

14654 - 29307 27.6 46.3 33.7 -11.7

29307 - 58614 38.7 51.2 3.3 -17.4

58614 - 293071 23.4 33.2 59.0 20.8

293071 - 1465355 49.4 53.3 -9.6 -15.4

Impact Impact Analysis Analysis East of England



Domestic 0-73.2 36.0 0.0 0.3

Firm 73.2 – 146.5 32.3 5.3 5.7

146.5 – 293.1 32.1 6.1 6.6

293.1 – 439.6 33.4 4.7 5.2

439.6 – 586.0 33.8 4.3 4.8

586.0 – 732.0 34.6 3.4 3.8

Firm 732 - 2198 34.7 2.3 2.8

2198 - 2931 39.1 -1.9 -1.4

2931 - 5861 40.3 -2.4 -2.0

Firm 5861 - 14654 40.9 -2.0 -1.6

14654 - 29307 50.8 -10.4 -10.0

29307 - 58614 50.6 -9.4 -9.0

58614 - 293071 45.6 -3.6 -3.2

293071 - 1465355 67.0 -17.9 -17.6

Interruptible 5861 - 14654 15.9 37.4 105.6 5.6

14654 - 29307 40.0 50.7 1.6 -16.4

29307 - 58614 41.1 52.2 0.9 -16.8

58614 - 293071 53.3 66.7 -16.3 -30.5

293071 - 1465355 47.7 54.7 -4.5 -14.7

Impact Impact Analysis Analysis Northern



Domestic 0-73.2 35.6 -0.8 -0.6

Firm 73.2 – 146.5 29.3 5.8 6.0

146.5 – 293.1 29.3 6.4 6.6

293.1 – 439.6 33.0 2.0 2.2

439.6 – 586.0 34.3 0.4 0.6

586.0 – 732.0 33.6 1.3 1.6

Firm 732 - 2198 34.4 1.3 1.4

2198 - 2931 37.2 -0.5 -0.4

2931 - 5861 38.7 1.3 1.5

Firm 5861 - 14654 40.9 -2.2 -2.1

14654 - 29307 50.5 -8.2 -8.1

29307 - 58614 53.9 -8.6 -8.5

58614 - 293071 46.7 0.5 0.5

293071 - 1465355 96.4 -19.4 -19.2

Interruptible 5861 - 14654 32.2 48.1 22.0 -7.9

14654 - 29307 37.6 53.7 11.4 -12.0

29307 - 58614 30.2 56.6 37.2 -10.1

58614 - 293071 62.3 59.3 17.7 20.1

293071 - 1465355 62.9 48.7 11.0 18.3

Impact Impact Analysis Analysis Wales and West



Domestic 0-73.2 31.7 -0.1 0.0

Firm 73.2 – 146.5 29.0 -0.4 -0.4

146.5 – 293.1 26.9 2.0 2.0

293.1 – 439.6 28.6 0.1 0.1

439.6 – 586.0 31.0 -2.9 -2.9

586.0 – 732.0 29.6 -1.1 -1.1

Firm 732 - 2198 31.0 0.8 0.8

2198 - 2931 35.3 -2.7 -2.7

2931 - 5861 33.5 0.2 0.2

Firm 5861 - 14654 41.2 -6.0 -6.0

14654 - 29307 38.8 -1.2 -1.2

29307 - 58614 51.0 -9.2 -9.2

58614 - 293071 53.1 -7.5 -7.5

293071 - 1465355 55.7 -3.7 -3.7

Interruptible 5861 - 14654 25.8 27.2 20.3 15.8

14654 - 29307 25.5 26.7 26.1 21.6

29307 - 58614 31.8 33.5 10.2 6.1

58614 - 293071 43.7 45.8 -7.1 -9.9

293071 - 1465355 52.9 54.2 -4.6 -6.1

Impact Impact Analysis Analysis Scotland



Domestic 0-73.2 38.13 0.8 3.0

Firm 73.2 – 146.5 37.70 2.4 2.4

146.5 – 293.1 37.70 2.4 2.4

293.1 – 439.6 39.84 -0.1 -0.2

439.6 – 586.0 40.65 -1.1 -1.1

586.0 – 732.0 41.44 -2.0 -2.2

Firm 732 - 2198 41.47 -1.5 -1.7

2198 - 2931 40.82 0.2 0.1

2931 - 5861 43.30 -2.1 -1.5

Firm 5861 - 14654 47.75 -5.9 -5.8

14654 - 29307 50.51 -7.2 -7.2

29307 - 58614 64.06 -17.2 -17.3

58614 - 293071 79.60 -24.8 -25.0

293071 - 1465355 93.95 -30.9 -30.9

Interruptible 5861 - 14654 0.00 43.30 24.2 -2.0

14654 - 29307 0.00 55.38 6.9 -15.3

29307 - 58614 38.98 46.13 13.4 -3.6

58614 - 293071 38.84 58.1 10.1 -21.7

293071 - 1465355 41.93 59.63 -30.8 -12.3

Impact Impact Analysis Analysis Southern



Domestic 0-73.2 31.45 1.0 1.0

Firm 73.2 – 146.5 31.82 0.5 0.5

146.5 – 293.1 31.72 0.7 0.7

293.1 – 439.6 31.62 0.9 0.9

439.6 – 586.0 32.13 0.1 0.1

586.0 – 732.0 32.72 -0.7 -0.7

Firm 732 - 2198 33.35 -0.8 -0.8

2198 - 2931 35.65 -2.0 -4.3

2931 - 5861 37.33 -4.7 -4.6

Firm 5861 - 14654 40.97 -9.2 -9.2

14654 - 29307 42.02 -10.2 -10.2

29307 - 58614 53.33 -29.1 -29.1

58614 - 293071 47.84 -12.4 -12.4

293071 - 1465355 60.65 -18.5 -18.5

Interruptible 5861 - 14654 23.58 38.56 59.7 34.0

14654 - 29307 29.96 53.35 30.1 -42.6

29307 - 58614 49.25 50.91 -16.2 -12.5

58614 - 293071 34.00 46.19 21.5 -10.6

293071 - 1465355 68.15 73.94 -32.0 -23.9

dnpc03 report ldz system charges capacity/commodity split and interruptible discounts

Documents