dcmf.co.uk

DCP 126 (illustrative tariff forecasts)

by Franck Latrémolière on Monday 18 March 2013

DCP 126 expands the quarterly DCP 066 report to include illustrative CDCM tariffs. The DNO is not asked to stand behind these tariffs to any meaningful extent, they just show what would happen if the DCP 066 numbers were plugged into a CDCM model. The disclaimer makes the unreliability of the information clear:

"PLEASE NOTE THAT THESE ARE ILLUSTRATIVE TARIFFS ONLY AND ARE NOT TO BE CONSIDERED TO REPRESENT THE INDICATIVE OR FINAL TARIFFS WHICH WILL BE APPLIED BY THIS COMPANY"

Ofgem's decision to enforce this change says:

... We think that only DCUSA General Objective 3.1.2 is relevant for this assessment. ...

DCUSA General Objective 3.1.2 – the facilitation of effective competition in the generation and supply of electricity and (so far as is consistent with that) the promotion of such competition in the sale, distribution and purchase of electricity

... the modification would have a beneficial impact on competition in the supply market. It would have the following two effects which would assist in reducing barriers to entry to the supply market:

  • reduce the cashflow risks on suppliers, particularly small suppliers and those with a non-diversified customer base who are less able to manage these risks effectively; and
  • reduce the need for suppliers to undertake modelling of the impact of changes to inputs to the CDCM and EDCM models themselves, which may be a complex process.

My take: not much harm done.