provision of third party access to licence exempt electricity and gas networks andy pace 4 october...
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Provision of third party access to licence exempt electricity and gas networks
Andy Pace
4 October 20121 | Energy Networks Association - DCMF
Background
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The Electricity and Gas (Internal Markets) Regulations 2011 introduce new obligations on licence exempt distribution and supply undertakings, including a duty to facilitate third party access to their electricity and gas networks.
Relevant DECC documents
DECC Draft Guidance: Provision of third party access to licence exempt electricity and gas networks, 14 October 2011.
DECC Revised Guidance: Provision of third party access to licence exempt electricity and gas networks, February 2012.
Relevant Ofgem documents:
Guidance on third party access charges for licence exempt gas and electricity distribution networks 151/11 dated 10 November
4 October 2012
Proposed Solutions
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Full Settlement Metering Approach
All premises within the unlicensed network have meters.
All premises are charged DUoS as normal
No DUoS charged at boundary meter
No settlement issues
Difference Metering Approach
Some premises on unlicensed network elect to move supplier
These premises will be required to have half hourly metering
Meter readings of these premises will go through normal settlement process.
Boundary meter reading of the unlicensed network will be reduced by the units of the premises who have elected to move supplier.
Implications on how DUoS derived
4 October 2012
Difference Metering Approach
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4 October 2012
TPA Working Group
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TPA working group has met twice and includes customer representatives
No issues with DUoS billing for full settlement metering approach
Consultation completed on 2 options for apply DUoS under the difference metering approach:
OPTION 1: Apply DUoS at boundary
DUoS charged at boundary as normal on raw meter data (not adjusted for difference metering)
Supplier of premises within unlicensed network not charged DUoS for site
Unlicensed network provider charges premises using their approved methodology for use of system charges (via supplier)
Requires raw data and difference data to be available for the boundary meter.
Implications on settlement process
4 October 2012
TPA Working Group
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OPTION 2: Apply DUoS at boundary and individual premises
DUoS charged to premises on unlicensed network who have elected to move suppler as follows:
• Same unit rates as applied at boundary meter
• Zero capacity charges (unlicensed network operator will charge this element)
• Zero reactive charges (unlicensed network operator will charge this element)
• Possibly an element of the fixed charge
DUoS charged at the boundary meter as follows (on adjusted meter readings):
• Capacity charge (based on MIC)
• Reactive charges
• Unit rates
• Fixed charge (possibly reduced)
• Gross flow required to determine excess capacity
• Gross flow required to determine full reactive charge
4 October 2012
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4 October 2012
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4 October 2012
Analysis of TPA Charging Methods
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4 October 2012
Charging Method
Strengths Weaknesses
Boundary•One bill to the supplier
•Favoured by majority of DNOs
•Follows general industry approach of network billing
•Ensures cost reflectivity regarding the supplier licence
•Simplest flows of data and billing
•Customers at the meeting were not keen on this
option, preferring the Customer charging option
•Needs a new flow of gross data
Customer •Preferred option for the customers that attended the
meeting and some of their suppliers
•Customers believe that this approach will allow them to
clearly be able to see their direct DUoS cost
•Needs a new flow of gross data
•More complex solution with additional data and
billing movements and more scope for error/double
counting
•Increased financial risk for parties given the number
of billing transactions
•Unclear if legal under DNO licences
•Likely to be more expensive due to the increased
flows information and billing, through administrative
costs
•Majority of DNOs favoured Boundary option
•Suppliers receive multiple bills
Next Steps
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Draft document circulated to working group
Agreed document will be sent to Ofgem with 2 key questions:
Confirm the legality/appropriateness of the customer charging option
Request clear guidance on Ofgem’s preference on charging
4 October 2012