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
ETC 25: Incentive to Reduce Sulphur Hexafluoride Gas Emissions (SF6)
Drafting status: Current working draft for NGET and for SPTL provided in Supporting
Document 1. Working draft for SHETL to be provided in the Second Consultation.
2.99. The purpose of this proposed new condition is to establish an incentive for the
Licensee to efficiently mitigate the leakage of sulphur hexafluoride (SF6) from assets
on the Licensee‟s transmission system.
2.100. As part of RIIO we have modified the TPCR4 incentive scheme 46 to apply to
actual emission levels from the Licensee‟s transmission system instead of a
percentage rate of emissions.
2.101. We have also changed the incentive so that it will reward or penalise the
Licensee according to whether emissions are above or below the baseline. The
incentive amount has also been changed to the non-traded equivalent carbon price.
2.102. The effect of this condition is to adjust the Licensee‟s revenue up or down
based on the difference between its baseline and the actual level of SF6 emissions for
that Licensee.
ETC 28: Arrangements for the recovery of uncertain costs
Drafting status: Current working draft provided in Supporting Document 1. One draft
for each Licensee.
2.103. The aim of this proposed new condition is to allow for the recovery, during the
price control, of additional costs through allowed revenues. The current licences also
include this provision. 47
2.104. This condition updates the areas of cost covered and imposes some
restrictions on the recovery of such costs. The details of which are outlined in the T1
IP Documents for NGET 48 and the FP Document for SPTL and SHETL. 49 The output of
this condition (IAE) now impacts allowed revenues through the annual iteration of
the PCFM.
2.105. The effect of this change is to improve transparency around the
arrangements, limit the number of potential changes to allowed revenue and to
incorporate the new financial modelling arrangements.
46 As set in Part 3 of SpC D5 (NGET) and J5 (SPTL and SHTEL).
47 Currently SpC D2 (J2 for SPTL and SHETL) contains provision for logging up costs (LC term), and SpC
J4 (SPTL and SHETL only) contains provision for an income adjusting event (IAT term), these provision will
no longer exist.
48 RIIO-T1: Initial Proposals for NGET and NGGT – Cost assessment and uncertainty
49 RIIO-T1: Final Proposals for SP Transmission Ltd and Scottish Hydro Electric Transmission Ltd