About the boundary between the CDCM and the EDCM

by Franck Latrémolière

This article was published in 2014. It has not been updated and does not reflect the current position. (As of January 2017, the position is worse, because of DCP 228.)

Here is some information about the CDCM/EDCM boundary.

Why is there a boundary?

The 14 regional power distribution companies in England, Wales and Scotland use two main distribution charging methodologies:

• The CDCM applies to the vast majority of sites, including all supplies at low voltage (230 Volt single phase or 400 Volts three phases).
• The EDCM applies to a small number of sites, including all supplies at voltages greater than 22,000 Volts.

EDCM tariffs are set individually for each site, whereas the CDCM tariff for each category of site is uniform across each of the 14 DNO areas (GSP Groups).

However, CDCM tariffs are different, often significantly so, between different DNO areas (GSP Groups), even within the same DNO group.

What is the current boundary?

The rules as to which site gets which methodology are in the distribution licence, specifically clause 13B.6 in the electricity distribution consolidated standard licence conditions 22 April 2014 (284 pages, PDF). This reads as follows:

13B.6 For the purposes of this condition [condition 13B "EHV Distribution Charging Methodology"], Designated EHV Properties [i.e. those subject to the EDCM] are any of the following:

(a) Distribution Systems connected to the licensee’s Distribution System at 22 kilovolts or more;

(b) premises connected to the licensee’s Distribution System at 22 kilovolts or more;

(c) Distribution Systems connected directly to substation assets that form part of the licensee’s Distribution System at 1 kilovolt or more and less than 22 kilovolts where the primary voltage of the substation is 22 kilovolts or more and where the Metering Point is located at the same substation; and

(d) premises connected directly to substation assets that form part of the licensee’s Distribution System at 1 kilovolt or more and less than 22 kilovolts where the primary voltage of the substation is 22 kilovolts or more and where the Metering Point is located at the same substation.

If both charging methodologies reflect costs, does the boundary matter?

If both charging methodologies reflected costs, then the boundary might not matter.

The EDCM is so complicated and opaque that it is difficult to comment on its cost reflectivity.

But what is not in doubt is that the CDCM is not at all cost-reflective: CDCM charges are often dominated by a "revenue matching" element which makes no attempt at reflecting any cost or investment by the distribution network company.

In general terms, the CDCM undercharges for availability and capacity, particularly at low voltages, and overcharges for units consumed, particularly at high voltages.

The overall effect is that for most properties close to the CDCM/EDCM boundary in the licence, the charge calculated in accordance with the CDCM is much higher than the charge calculated in accordance with the EDCM.

CDCM and EDCM illustrations – flat load February 2013 data (Microsoft Excel)

What is wrong with the current boundary?

The current boundary unfairly discriminates between high-voltage supplies (between 1,000 Volts and 22,000 Volts) on the basis of the location of their metering point.

Also, the current boundary requires distributors to handle site-specific import tariffs for many solar farms, which export power to the distribution network at voltages above 22,000 Volts. These tariffs probably raise negligible amounts of money and their site-specific nature serves no useful purpose, but it imposes an administrative burden on everyone who works with distribution tariffs.

Cribsheet for acronyms and technical terms

Ofgem is the Gas and Electricity Markets Authority, a UK Government department.

A kilovolt is 1,000 Volts.

CDCM refers to the Common Distribution Charging Methodology, described in schedule 16 of DCUSA v6.2 web edition (899 pages, PDF).

EDCM refers to the Extra High Voltage Distribution Charging Methodologies, described in schedules 17 and 18 of DCUSA v6.2 web edition (899 pages, PDF).

Important notices about acronym clashes

There is no known relationship between the EDCM charging methodologies, EDCM Precision Wire Erosion Ltd, EDCM Building Services Consulting Engineers Ltd, and the Every Disabled Child Matters (EDCM) campaign.