Energy Networks Association (2008-2009) Development of common distribution charging methodology (CDCM) and model

Reckon assisted the regional electricity distribution network operators in Great Britain on the development and implementation of a common method for determining the structure of charges for use of their networks at lower voltages (typically LV and 11 kV).

The companies, working with the regulator, developed a common charging method to replace the previous complex patchwork of existing tariffs and cost allocation rules.

Our role was to:

One of the main issues arising in the project is the need to ensure that the new tariff structure will not have undue distortionary effects on competition. Smaller "independent" network operators have already raised concerns about the effect of some of the existing tariff structures on their businesses, and significant effort was devoted to understanding these issues and seeking a solution that would be acceptable to all parties and to the regulator.

The project involved innovative use of information technology both for spreadsheet management and to manage a relationship with seven client companies, the regulatory authority and other stakeholders involved in the project:

*Franck Latrémolière

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Reckon LLP is an economics consultancy with expertise in data analysis, economic regulation and competition law.