RIIO-T1 and GD1: Draft licence conditions – First informal ... - Ofgem
RIIO-T1 and GD1: Draft licence conditions – First informal ... - Ofgem
RIIO-T1 and GD1: Draft licence conditions – First informal ... - Ofgem
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<strong>RIIO</strong>-<strong>T1</strong> <strong>and</strong> <strong>GD1</strong>: <strong>Draft</strong> <strong>licence</strong> <strong>conditions</strong> <strong>–</strong> <strong>First</strong> <strong>informal</strong> <strong>licence</strong> drafting<br />
consultation<br />
Outst<strong>and</strong>ing issues with respect to ETC 39<br />
2.111. We note that this draft <strong>licence</strong> condition does not fully reflect companies‟<br />
recent <strong>licence</strong> drafting working group comments.<br />
ETC 41: Network Development Policy <strong>and</strong> Wider Works Volume Driver (NGET<br />
only)<br />
<strong>Draft</strong>ing status: We will provide a working draft in the Second Consultation.<br />
2.112. The purpose of this proposed new condition is to require the Licensee to have<br />
a Network Development Policy, approved by the Authority, setting out how Licensees<br />
will determine when to invest <strong>and</strong> reinforce the Licensee transmission system. The<br />
condition also sets out a volume driver mechanism to determine the Licensee allowed<br />
expenditure for wider works outputs. The allowed expenditure determined by this<br />
condition will form a PCFM Variable Value that will impact allowed revenue through<br />
the annual iteration of the PCFM. 52<br />
2.113. There is a degree of uncertainty over the exact location, timing <strong>and</strong><br />
magnitude of new transmission connected generation <strong>and</strong> therefore that<br />
reinforcement required on the Licensee‟s transmission system price control period.<br />
The volume driver mechanism, along with the Network Development Policy will<br />
ensure that the Licensee has enough flexibility within the price control settlement to<br />
invest in its transmission area to meet customer requirements <strong>and</strong> maint ain security<br />
st<strong>and</strong>ards.<br />
2.114. The effect of this condition is to make provisions for a volume driver to<br />
automatically adjust NGET‟s allowed revenue subject to the delivered outputs<br />
complying with the requirements of its Network Development Policy. The condition<br />
will set the agreed unit cost allowances for delivering increases in boundary<br />
capability at different boundaries on the Licensee‟s transmission system.<br />
ETC 53: Network Access Policy<br />
<strong>Draft</strong>ing status: Current working draft provided in Supporting Document 1.<br />
2.115. The purpose of this proposed new condition is to provide for each TO to<br />
develop a Network Access Policy (NAP). These policies are being designed to support<br />
effective co-operation <strong>and</strong> communication between the TOs <strong>and</strong> the SO in relation to<br />
managing planned <strong>and</strong> unplanned outages on the system. A progress update on this<br />
52 For further details please see Chapter 6: The Annual Iteration Process for the Price Control Financial<br />
Model <strong>and</strong> updating of base revenue allowances
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