RIIO-T1 and GD1: Draft licence conditions – First informal ... - Ofgem

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RIIO-T1 and GD1: Draft licence conditions – First informal licence drafting
consultation
Overview of proposed changes to electricity transmission
Special Conditions (SpCs)
Existing SpCs to be considered further later in RIIO drafting process
2.33. Given the ongoing development of licence drafting we consider it appropriate
to review the following SpCs later in the RIIO licence drafting process. We are not
therefore consulting on any changes to the following SpCs at this time and will revisit
in time for the Second Consultation.
� Special Condition A: Definitions and interpretation [ETC 129]
� Special Condition D1 (NGET) and J1 for SPTL and SHETL: Transmission
Network Revenue Restriction: Definitions [ETC 19]
� Special Condition AA5: Definitions (NGET only) [ETC 130]
2.34. We also propose to amend the following SpCs of the transmission licences.
Where the condition reference is different between NGET and SHETL/SPTL, the
relevant SpC reference for SPTL/SHETL is shown in brackets.
Special Condition D2 (J2 for SPTL and SHETL): Restriction on Transmission
Network Revenue [ETC 20]
Drafting status: Current working draft provided in Supporting Document 1.
2.35. This SpC calculates the maximum revenue the Licensee is allowed to recover
from customers by bringing together terms from other licence conditions. It also sets
out the calculation of the price index adjust ment term used throughout the licence
and calculates the correction factor (K) for the treatment of over/under recovery of
revenue.
2.36. We have updated the methodology for calculating the price index adjust ment
term. This is consistent with the policy as set out in our decision on RPI indexation in
July 2011. 22 We have also updated the defined terms to introduce a consistent
approach across the transmission Licensees.
2.37. We have also incorporated the calculation of the correction factor (K) into the
licence condition. This removes the need for the SpCs outlined in Table 1.
22 Decision on RPI indexation method:
http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?docid=117&refer=Networks/Trans/PriceControls/
RIIO-T1/ConRes