Response to SSE appeal against Ofgem decision on CMP317/327

Decision
Publication date
Company
SSE Generation Limited
Industry sector
Transmission Network

On 17 December 2020, Ofgem approved code modifications CMP317/327 and CMP339. The modifications were to implement the correct interpretation of a regulation which limits the average charges that can be paid for use of the transmission network by large generators, and remove payments which were (and at present still are) incorrectly being given to generators as a result of the incorrect interpretation. SSE Generation Limited has appealed the decisions to the Competition and Markets Authority (CMA).

Ofgem statement:

“Our analysis indicates that correcting this error of interpretation will benefit consumers substantially, by reducing the amount consumers pay to large generators through their bills, whilst also creating a more efficient system outcome.

“We will defend our decision, and protect the interests of consumers, at the Competition and Markets Authority.

“This appeal has no impact of the other elements of the Targeted Charging Review (TCR).”

Notes to editors:

  1. CMP317/327 is a decision that will implement part of the TCR Decision from November 2019, to set the Transmission Generation Residual to £0 and ensure closer alignment to the correct interpretation of an EU regulation and in so, doing achieve compliance with it.  The interpretation of the regulation was the topic of a CMA appeal decision in 2018.
  2. The regulation concerns compliance with the permitted range for average annual transmission charges paid by generators, and currently the calculation of charges used to determination compliance with this range is incorrectly implemented.
  3. This EU regulation that came into force in 2011, and has been adopted into UK domestic law following our exit from the EU.
  4. Our CMP317/327 decision document can be found here: https://www.ofgem.gov.uk/publications-and-updates/cmp317-cmp327-excluding-assets-required-connection-and-removing-transmission-generator-residual
  5. Our CMP339 decision document can be found here: https://www.ofgem.gov.uk/publications-and-updates/cmp339-consequential-changes-cmp317327-tcr
  6. Further information on the Targeted Charging Review can be found here: https://www.ofgem.gov.uk/electricity/transmission-networks/charging/targeted-charging-review-significant-code-review