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 />
actual delivered undergrounding outputs. The condition will set the agreed unit cost<br />
allowances for delivering undergrounding on the Licensee‟s transmission system.<br />
ETC 123: Dem<strong>and</strong> related infrastructure volume driver (NGET only)<br />
<strong>Draft</strong>ing status: We will provide a working draft in the Second Consultation.<br />
2.133. The purpose of this proposed new condition is to specify the baseline allowed<br />
expenditure the Licensee will receive for delivering dem<strong>and</strong> related infrastructure<br />
outputs during <strong>RIIO</strong>-<strong>T1</strong>.<br />
2.134. We also currently intend the draft <strong>licence</strong> condition to set out a volume driver<br />
mechanism to calculate an adjustment term for Licensee‟s allowed expenditure if the<br />
level of dem<strong>and</strong> related infrastructure outputs during <strong>RIIO</strong>-<strong>T1</strong> is different to the level<br />
assumed in setting the baseline. This term will form a PCFM Variable Value that will<br />
impact allowed revenue through the annual iteration of the PCFM. 62<br />
2.135. The effect of this condition is to make provisions for a volume driver to<br />
automatically adjust the Licensee‟s allowed expenditure for the efficient costs of<br />
actual delivered dem<strong>and</strong> related infrastructure outputs.<br />
2.136. It also requires the Licensee to provide evidence of the trigger for delivery of<br />
new dem<strong>and</strong> related infrastructure in the form of the commercial agreement with the<br />
customer or distribution network owner. The condition will set the agreed unit cost<br />
allowances for delivering dem<strong>and</strong> related infrastructure on the Licensee‟s<br />
transmission system.<br />
ETC 124: Uncertainty mechanism for preconstruction works related to<br />
integrated network solutions.<br />
<strong>Draft</strong>ing status: We will provide a working draft in the Second Consultation.<br />
2.137. The purpose of this proposed new condition is to set out an uncertainty<br />
mechanism to make adjust ments to Licensee‟s allowed expenditure if it is required to<br />
undertake preconstruction engineering works for integrated onshore-offshore<br />
network reinforcement during <strong>RIIO</strong>-<strong>T1</strong>. This term will form a PCFM Variable Value<br />
that will impact allowed revenue through the annual iteration of the PCFM. 63<br />
2.138. We are yet to take a decision on the preferred approach to determine the<br />
feasible <strong>and</strong> optimal network solutions.<br />
62 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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