Citizens Advice response to the Access and Forward-looking Charges Significant Code Review - Consultation on Minded to Positions
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Citizens Advice welcomes Ofgem’s intention to ensure that effective charging signals are provided to network users in the best interests of consumers and the network, and to ensure that Net Zero is achieved at least cost. We believe that cost-reflective signals are key to delivering Net Zero at an efficient cost.
Whilst we are supportive of the general direction of travel, we are concerned that some elements of the distribution connection charging proposals do not provide sufficient signals and could lead to consumers funding inefficient system development.
To protect consumers we believe some signalling is needed for users who have locational flexibility to avoid connecting to the network in locations which would trigger the need for reinforcement. This is especially important where reinforcement required is at high costs.
Key recommendations
Recommendation 1 - Contribution to reinforcement should be reduced (but not removed) for both demand and generation. This should support low carbon technologies connecting whilst maintaining an efficiency signal.
Recommendation 2 - Introduce a high cost cap (HCC) for demand connections to protect demand customers from excessive reinforcement costs.
Recommendation 3 - Retain the high cost cap for generation connections with a one voltage rule (i.e. the HCC takes precedence), calculated relative to the additional demand capacity that is created, to ensure sufficient protection is provided.
Recommendation 4 - Revise Impact Assessment in light of changes in proposed ED2 expenditure based on these proposals and review the proposals.
This response is support by a research report which is available here: