CDCM Annual Review Workshop

Mo SukumaranSSEPD

(on behalf of DNOs)

17 May 2011

12 May 20111 | Energy Networks Association - CMG

Workshop agenda

12 May 20112 | Energy Networks Association – CMG

Introductions and safety brief - 10:00 am

Purpose of the workshop and agenda - 10:05 am

CDCM Annual Review – Process and objectives - 10:10 am

CDCM Model Overview - 10:30 am

Improvements to CDCM - 11:30 am

Generation Charging – GDA - 12.15 pm

Lunch - 12:30 pm

Stakeholder Feedback - 13:15 pm

Next steps and Deliverables - 14:15 pm

Any other business - 14:30 pm

Close - 14:45 pm

The purpose of today• Our objective is to review the CDCM methodology.•We are not looking to work up solutions today but rather to identify issues.•We have asked Reckon consultants to present and challenge areas of the CDCM•Should promote debate and discuss issues•After lunch we will look to group like issues

CDCM Annual Review Process & Objectives

Harvey JonesCE Electric

(on behalf of DNOs)

12 May 20114 | Energy Networks Association - CMG

Our Licence obligations•13.1 The licensee must at all times have in force:•(a) a Use of System Charging Methodology which the Authority has approved on the basis that it achieves the Relevant Objectives; and•(b) a Connection Charging Methodology which the Authority has approved on the basis that it achieves the Relevant Objectives (each, separately, “the Charging Methodology”), and, except with the consent of the Authority, must comply with the Charging Methodology as modified from time to time in accordance with this condition.•13.2 The licensee must, for the purpose of ensuring that the Charging Methodology•continues to achieve the Relevant Objectives:•(a) review the methodology at least once every year; and•(b) subject to paragraph 13.4, make such modifications (if any) of the methodology as are necessary for the purpose of better achieving the Relevant Objectives.

The relevant objectives•The Relevant Objectives in relation to the Charging Methodology are:•(a) that compliance with the methodology facilitates the discharge by the licensee of the obligations imposed on it under the Act and by this licence; - we need to meet our licence and electricity act obligations•(b) that compliance with the methodology facilitates competition in the generation and supply of electricity, and does not restrict, distort, or prevent competition in the transmission or distribution of electricity; Does not get in the way of market competition•(c) that compliance with the methodology results in charges which reflect, as far as is reasonably practicable (taking account of implementation costs), the costs incurred by the licensee in its Distribution Business; reflects cost incurred by our business•and•(d) that, so far as is consistent with sub-paragraphs (a), (b), and (c), the methodology, as far as is reasonably practicable, properly takes account of developments in the licensee’s Distribution Business. Takes account of structural changes in our businesses

The change process

29 April 20107 | Energy Networks Association

•Licence condition 50.28 sets out that DNOs must make arrangements to provide for the review and future modification (where appropriate) of the modification arrangements.

Output from annual review

CDCM Annual Review Improvements Planned

Simon YeoWPD

(on behalf of DNOs)

12 May 20118 | Energy Networks Association - CMG

CDCM Annual Review Improvements Planned

‘Methodologies Issues Group’ (MIG)

Purpose:

• Forum for users and stakeholders to discuss methodology

issues before formal Change Proposals are raised.

Scope of group:

• Defining issues submitted

• Gathering information relative to the issue

• Identifying possible solutions

12 May 20119 | Energy Networks Association - CMG

CDCM Annual Review Improvements Planned

MIG Issues Log

• 15* Issues on MIG log – each assigned: leader, urgency /

complexity rating, target start date, target submission date

and target implementation date.

MIG Meetings

• MIG meets on a monthly basis

• Open forum meeting

• Papers published*some contain multiple similar issues grouped together

12 May 201110 | Energy Networks Association - CMG

CDCM Annual Review Improvements Planned

12 May 201111 | Energy Networks Association - CMG

Issue No Title Target Implementation

1 Commonality of the network (500MW) model April 2013

2 Standing charge factors April 2013

3 Reactive proxy data April 2014

4 Justification of non-scaling Generator scaling April 2013

7 & 17 Excess capacity management & de-energised site charges April 2013

10 & 13 Generation in demand rich areas April 2012

11 & 21 UMS Tariffs April 2012

12 & 22 Use of HH and NHH forecast data for costing April 2013

13 HH generation intermittent/non intermittent tariffs April 2012

14 UMSO administration charges April 2013

15 Time of day bands to seasonal time of day time bands April 2014

16 Delinking April 2014

18 HV sub & LV sub additional IDNO connection points April 2012

19 Charging of reactive energy where there is no reactive data April 2014

26 CDCM default tariff application TBC

CDCM Annual Review Improvements Planned

• Contact dcmf@electralink.co.uk:

– To raise an Issue (standard template)

– To be added to the MIG distribution list

– For advice on application of change process

12 May 201112 | Energy Networks Association - CMG