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< Concessionary rates for churches and charities - who will pay for it, asks industry? | Customers urged to save the country's water, and their own money >
Distribution network operator charging changes set to be introduced next year
Ofgem has called on electricity distribution network operators (DNOs) to do more to inform customers about "highly variable, and in some cases significant" changes to their charging structures mandated by the regulator.
In the past, each DNO had its own methodology for calculating charges for generation and demand customers to use the networks. But last year Ofgem gave the DNOs until April 2010 to develop a common distribution charging methodology that would make it easier for distributed generators to connect to the network. Ofgem, in a four-week consultation published last week, said it was "minded to approve" the methodology proposal.
Although the effects vary greatly between DNOs, on average the change will increase prices for domestic and half-hourly metered customers, and decrease prices for other demand customers and generators on the distribution network. It will also increase margins for independent DNOs.
Although the effect will be significant, Ofgem decided against phasing in the change because it would delay the "substantial benefits" of the new methodology. In an open letter it asked DNOs to inform their customers, especially half-hourly metered users who are likely to be most affected.
A methodology for high-voltage DNO connections is due to be completed in 2011.
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