Competition in Connections Review Presentation to the ECSG – Roger Morgan, Senior Manager Connections Policy 5 July 2006
Overview of slides � summary of responses to May 06 consultation letter - voluntary standards, overhead line works, IDNOs, DNO affiliates, unmetered SLA � potential scope of August consultation document – formal obligations / increased regulation, regulation of affiliates, connections application process � next steps 5 July 2006
Summary of responses - voluntary standards of service � 13 respondents (including one DNO) support formalising standards – voluntary approach is not delivering required level of performance � little science behind the formulation of the standards – review can address this � standards are effective if adhered to – introduce RIGS to ensure a consistent approach 5 July 2006
Contestable overhead line works four DNOs support the grouping of some overhead line works � � one DNO suggests that the contestable/non-contestable split should not be altered – already contestable at LV and HV one ICP / DNO suggests that this is a minor issue that may detract from � the more fundamental concerns that need addressing through the Review 5 July 2006
IDNOs (1) � majority of DNOs suggest that a number of DNO/IDNO interface issues need resolving: - need for a forum to debate interface issues - effects of networks on resilience of upstream networks - increased volumes of connections applications for DNOs since the introduction of IDNOs 5 July 2006
IDNOs (2) premature to review IDNO framework - let arrangements bed in � IDNOs suggest that the following DNO/IDNO interface issues need to � be resolved: - exit point capacity charges - boundary metering and boundary metering charges - managing system security and multiple points of connections - dual access to isolation equipment - voltage drop issues 5 July 2006
DNO affiliates mixed views from DNOs - some support inclusion within the Review, some � oppose on the basis that adequate measures are in place - (SLC 4C) some DNOs and ICPs suggest that the SP Manweb commitments should apply � to all DNOs with affiliates IDNO concerns: affiliates benefit in terms of access to info and sharing of � resources, affiliates distort true competition Ofgem should focus on compliance with existing legislation to address � behavioural concerns energywatch: supports affiliates as long as they do not create barriers to entry / � formal obligations should be put in place 5 July 2006
Unmetered service level agreement (1) � DNO views: - support concurrent obligations on both parties to make the SLA work - explore whether a voluntary or statutory scheme is required - definitional issues surrounding the SLA need to be resolved and robust reporting arrangements are required 5 July 2006
Unmetered service level agreement (2) � Local Authority views: - the SLA trial has encouraged DNOs to take street lighting more seriously - two options (a) a national SLA with GSOPs or (b) a national SLA with locally agreed standards of service 5 July 2006
Potential scope of August consultation document (1) Introduce formal obligations / increased regulation? � - voluntary or formal standards - closer regulation of non-contestable activities – POC - introduce an improved and more effective dispute resolution process Connections application process: � - amend timescales for the provision of formal offers - extent of changes required to streamline the connections application process 5 July 2006
Potential scope of August document (2) � Affiliates: - establish procedures and reporting requirements governing the service an affiliate and non affiliate receive – SP Manweb commitments? - structural changes to separate monopoly from contestable activities? 5 July 2006
Potential scope of August document (3) IDNOs � - should we review the IDNO regulatory framework? Unmetered connections services � - continue with voluntary approach with performance targets – formalise licence conditions/GSOPs? - consider extent of further measures and policies to increase competition – is more work required in this respect? 5 July 2006
Next Steps � publish detailed consultation in August 06 � further workshops – focus on specific areas likely to include: - reviewing and setting new standards: industry input and guidance required - formal obligations: what is the most appropriate route 5 July 2006
Promoting choice and value for all gas and electricity customers 5 July 2006
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