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

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32 RIIO-T1 and GD1: Draft licence conditions – First informal licence drafting consultation ETC 17: Environmental Discretionary Reward Scheme Drafting status: Current working draft provided in Supporting Document 1. 2.88. The purpose of this proposed new condition is to establish arrangements for the Environmental Discretionary Reward (EDR) Scheme, and to determine the amount of incentive the Licensee shall receive in relation to its performance. 2.89. As part of RIIO we have consulted on introducing EDR Scheme to encourage the Licensee to achieve high standards in environmental management as well as facilitate the industry to move towards a low carbon energy system. 2.90. The effect of this condition is to make a positive adjust ment to the Licensee‟s revenue if they meet the performance criteria set by the EDR Scheme. For further information on the EDR Scheme Guidance, which will cover the performance categories, criteria as well as arrangements relating to administration, governance and revision of the EDR Scheme please see chapter 8. 41 2.91. Further work is required ahead of the Second Consultation to develop the EDR Scheme guidance document in further detail. ETC 18: Enhancement to Pre-existing Infrastructure in National Parks and Areas of Outstanding Natural Beauty Drafting status: Current working draft provided in Supporting Document 1. 2.92. The purpose of this proposed new condition is to specify visual amenity outputs the Licensee will be required to deliver in relation to existing transmission infrastructure in National Parks and Areas of Outstanding Natural Beauty. The condition also establishes provisions for the Authority to determine the amount of allowed expenditure the Licensee shall incur in the delivery of such outputs as a PCFM 42 Variable Value into the PCFM. 2.93. The effect of this condition is to enable the Licensee to request the Authority to determine the allowed expenditure in relation to specific visual amenity outputs in designated areas. 41 Chapter 8: Environmental Discretionary Reward (EDR) Scheme Guidance . 42 Further details on the PCFM can be found in chapter 6: The Annual Iteration Process for the Price Control Financial Model and updating of base revenue allowances
RIIO-T1 and GD1: Draft licence conditions – First informal licence drafting consultation ETC 24: Incentive adjustments relating to the licensee’s Stakeholder Satisfaction Output Drafting status: Current working draft provided in Supporting Document 1. 2.94. The purpose of this draft condition is to set out the key components of the customer satisfaction output. These relate to two separate incentives. One is based on performance against a survey of stakeholder and/or customer views of the transmission network company‟s performance. The other provides for a discretionary reward for effective engagement 43 where the decision to apply such a reward would be determined by the Authority. 2.95. Parts B and C of the draft licence condition give rise to the stakeholder engagement reward and the Stakeholder Engagement Reward Guidance associated document. The purpose of this associated document is to provide the licensee with information on the application and reward process. For further information on the Stakeholder Engagement Reward Guidance see Chapter 8 44 of this consultation. We believe that the licence drafting we have proposed is sufficient to establish this associated document and provide suitable governance arrangements should it need to be changed. 2.96. Part D of this licence condition requires further work ahead of the Second Consultation. This reflects ongoing policy development and trialling of the survey and related information by all four transmission owners and further work on the design of the financial incentives in light of this. 2.97. Appendix 1 of the Outputs and incentives Supporting Document 45 provides an update for this work. It is likely that the drafting for Part D will be different at least between the Scottish TOs and NGET/NGGT. This will reflect the greater element of NGET/NGGT surveys that will be based on direct customers of NGET and NGGT - where a significant record of results for recent years is available. 2.98. The draft condition provided is at an early stage of development and requires further internal consideration and development. We will work with companies to develop this drafting and expect to have in it in place by the Second Consultation. 43 The core components of the customer satisfaction output were agreed as part of the T1 Strategy Document. 44 Chapter 8: Stakeholder Engagement Reward Guidance 45 RIIO-T1: Initial Proposals for NGGT and NGET – Outputs, incentives and innovation 33
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RIIO-T1 and GD1: Draft licence conditions – First informal ... - Ofgem

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