Distribution price control calculations and licence conditions

Ofgem statutory consultation (338 pages, PDF) on the proposed licence modifications to implement the final proposals of the distribution price control review.

The document contains new price control calculations for all companies. According to Ofgem:

2.1. The price control calculations sheets published in the November 2004 Final Proposals document have been updated for two errors that were discovered as a result of comments made by some DNOs. The errors were:
• Correction of the calculation of tax allowances for a formula error in the application of the 23.5 percent capitalisation of opex. This affects all DNOs.
• Correction of the sliding scale for EDF for a data error in the price control calculation sheets and the financial model. The sliding scale revenue should be a positive value, but was input as negative in both documents. This only affects the 3 EDF Energy DNOs.

2.2. In addition, Ofgem has identified inconsistencies in the allocation of regulated and unregulated income in the calculation of price control allowances. Changes have therefore been made in the calculations of the price controls to reflect these issues.

For further information or advice please contact Franck Latrémolière.

Filed under Electricity, Ofgem, Price controls.

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