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ECSG Ofgem Update: Metered Connections Sub-Group

ECSG Ofgem Update: Metered Connections Sub-Group. 13 November 2007. 19 September 07 - ECSG Metered Sub-Group discussed. Morning session: CIC Review ‘good practice’ – quotation breakdowns / POC provided with quotes > £20k Afternoon session – two syndicate groups considered:

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ECSG Ofgem Update: Metered Connections Sub-Group

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  1. ECSG Ofgem Update: Metered Connections Sub-Group 13 November 2007

  2. 19 September 07 - ECSG Metered Sub-Group discussed Morning session: • CIC Review ‘good practice’ – quotation breakdowns / POC provided with quotes > £20k Afternoon session – two syndicate groups considered: • Partially funded diversions and reinforcements (proposal A2) • Standard adoption agreements

  3. Partially Funded diversions/reinforcement (proposal A2)What needs to be done to introduce competition?

  4. Why do DNOs partly fund some diversionsand reinforcement schemes? • Apportionment rules require DNOs to partially fund certain schemes • They provide DNOs with opportunities to develop their networks

  5. If competitive what issues might arise? • Technical issues – not a major consideration (accredited parties can undertake works) • DNO does not choose who does work that it will partially fund • DNO may lose of control over the works & management of impact on existing customers • Contractual terms can be complicated if more than one ICP is involved in undertaking works • EU procurement issues • Complexity in quoting costs • Treatment of unintended costs/risks – who pays?

  6. Overview of mechanics – step by step • Customer raises requirement through ICP to DNO – POC study suggests that reinforcement is required • Initial Design – ICP or DNO completes • Designs & quotes (undertaken by both parties) • Customer’s choice driven by – costs/timescales/service • If ICP wins the job – DNO would not pay more than under CAF rules

  7. Issues requiring further consideration by sub-group • Who is responsible for / resolves delays that may occur • How can a DNO be sure its licence obligations are met? • Could the ICP be appointed as an agent on behalf of the DNO?

  8. Convergence of Adoption AgreementsIs it appropriate to standardise adoption agreements?

  9. What are the essential elements of an adoption agreement? • Bi-partite or tri-partite ( involving DNO, developer, ICP) • Legal instrument to transfer ownership of installed assets to a DNO • Offer protection - Installed assets will get adopted • Water industry has a uniform adoption agreement – this took sometime to achieve

  10. Could some or all of an adoption agreement for assets be standardised? • Adoption agreements are generally the same from job to job (site specific details are included) • Developers perspective of a uniform agreement: • Reduce administrative / legal costs • Removes a potential delay in the non-contestable service application process

  11. Issues that may need to be considered to support a uniform adoption agreement? • DNOs have varying attitudes to risk – hence more detailed adoption agreements in some cases • Change procedures may be more complex for a uniform document • Uniform document may need to be longer to cater for varying requirements

  12. ECSG Metered sub group - way forward • Further debate required in both areas • Sub-group agreed that a further meeting is required to take forward both issues • Possible dates: • 27 November 07 • 4 December 07

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