Disapplying the High Cost Cap (£200 per kW rule)
We previously consulted on our proposals to undertake a trial under which the High Cost Cap – HCC (also known as the £200 per kW rule) in paragraph 5.15 of the Statement of Methodology and Charges for Connection to WPD’s Distribution System will be disapplied. This was in response to Ofgem’s call for DNOs to undertake trials to facilitate quicker and more efficient connections.
This trial would mitigate the effect of the £200/kW rule (High Cost Cap) so that when a group of customers sought a connection within a set time period and the aggregate capacity sought by those customers exceeds the £200/kW threshold (as if they were treated as a single connection scheme with this capacity), the reinforcement costs would be shared between those customers in proportion to the capacity in their connection offer (rather than being charged to the first customer that triggers the High Cost Cap).
As derogation from our Connection Charging Methodology would be required under the trial arrangements the approach was discussed directly with Ofgem and also with stakeholders at the CCSG. Advice on the approach was taken from CCSG members and Ofgem requested further information on the detail of the trial in order to consider the derogation further.
In light of developments around alternative connections and flexibility, the requirement for this trial has significantly reduced. However, we have proposed a template derogation to Ofgem that we might agree in principle with them for use if a significant High Cost Cap scheme could utilise it in order to trial the arrangements in the future.
Should you have any queries or have a scheme you believe could be considered for a trial arrangement in the future, please email us with your contact details to firstname.lastname@example.org.