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Concerns and Recommendations on Ofgem RIA - UNC Modification Proposal 0229

Ofgem's RIA is currently inclined to accept Modification Proposal 0229, which DNOs generally agree has sound principles. However, they raise concerns about the complexity of the proposal, which poses numerous challenges and potential delays. Issues include unclear guidelines, risks related to the selection of AUGE by the UNC Committee, and commercial interests undermining the neutrality of AUGE. DNOs propose a simplified process that ensures timely delivery while maintaining independence from commercial pressures, enhancing the overall efficiency of the proposed framework.

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Concerns and Recommendations on Ofgem RIA - UNC Modification Proposal 0229

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  1. Ofgem RIA – UNC Modification Proposal 0229 Chris Warner

  2. DNO concerns • Ofgem RIA states that it is ‘minded to accept’ Mod 0229 • DNOs accept that 0229 principles essentially sound. However: • Proposal as drafted (including guidelines) • Unduly complex • Numerous challenges and process ‘stop points’ • Unlikely to result in timeline to conclusion • Unmitigated risks exist • AUGE tender controlled by UNC Committee • Not acceptable for UNC Committee to select AUGE and then for Transporters to be forced to contract with selected party. • Eventualities - Suitability of candidate/or no candidates?

  3. DNO concerns (continued) • Multiple opportunities for parties to challenge/agree output of AUGE (AUGS) – undermines purpose of independent agent • Risk that challenges driven by commercial interests - undermines ‘neutrality’ of AUGE • Once appointed need to let AUGE conclude • Risk of changes to Guidelines which could impact Transporter contractual arrangements • Guidelines appear to be unclear as to the specific output i.e. the ‘methodology’ or ‘Statement’ or ‘AUGS’? Also timing and deliverability not clear. • Complexity threatens delivery within timescales – high likelihood that ‘zero volumes’ would result. • Process for AUGE/AUGS output unduly protracted – no output for up to 2 years from implementation.

  4. Possible alternative proposal • Based on Mod 0229 principles (includes appointment of independent AUGE & production of AUGS) • Simplified AUGE tendering and appointment process – wholly a Transporter responsibility • Addresses the scenario where AUGE is not appointed • Allows challenge and review but process will conclude in acceptable timescale • Reliance on AUGE as ‘independent’ authority ensures AUGS not influenced by commercial drivers/interests

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