1. GCF 9th July 2007 LDZ System Charges Capacity/Commodity Split and Interruptible Discounts

2. The Proposals
Restructure the LDZ system charges target capacity/commodity split from 50:50 to 95:5
Introduce partial capacity charges for Interruptible supply points, to maintain their current discount relative to having firm transportation, until interruption reform comes into force
Target Implementation date 1 April 2008

3. DN Rationale Proposal is more cost reflective
Will largely eliminate weather uncertainty
Will produce more predictable charges
Impact for domestic transportation: very small
Impact for I&C transportation: depends on the supply point Load Factor
Interruptible discounts maintained
Implement in 2008 in line with interruption reform tenders

4. Responses to Main Proposal
More information required re cost base and relative impact on customers
Impact on Domestic / fuel poor consumers
Energy efficiency
DN Response:
Detailed information provided on
Cost base for each DN
Impact for each load sector by DN
Proposal does not have disproportionate effect on fuel poor
Wider issues need to be handled through energy policy and price control discussions

5. Responses to Interruption Element
Cost reflectivity of interruptible element
DN Response:
This is an interim measure which maintains the current position
Not looking to change interruptible benefits prior to Interruption Reform
Overall impact of Cap/Com change on interruptible loads depends on load factor
Many interruptible loads appear to have lower than expected load factors, leading to negative overall impact
Opportunity for all DM loads to review their booked SOQs to ensure they reflect their load characteristics

6. Responses to Implementation Date
A variety of alternative implementation dates were suggested
DN Response:
This proposal improves our licence objectives and so should be done as soon as practicable.
April or October 2008 seem appropriate
We will consider further prior to definitive proposal

7. Information More detailed presentation from DCMF Discussion Paper
Responses to Discussion Paper
All available on Joint office Website