1. UNC 224 User Pays Charging
Phil Broom
29 January 2009

2. User Pays charging principles for UNC 224
23/05/2019
User Pays charging principles for UNC 224
UNC 224 will create user pays services and user pays charges which will be published in the Agency Charging Statement (ACS)
High level principles:
Cost reflective – ensure charges recover actual costs
Targeted – are the costs fair to all parties?
Transparent – easy to understand and administer
Encourage confidence – No hidden charges or unknowns

3. Charging Methodology for UNC 224 development costs
23/05/2019
Charging Methodology for UNC 224 development costs
Two potential models (and variants) developed:
“Membership fee”
1a) Flat
1b) Banded
“Availability fee”
2a) Flat
2b) Banded

4. 1. Membership fee model Joining fee paid on confirmation as DME
23/05/2019
1. Membership fee model
Joining fee paid on confirmation as DME
Costs targeted only at those who participate
Fee is based on forecast take-up (demand)
Risk of under/over recovery
Risk of reconciliation fees if under-recovery
1a) Flat fee – all users pay the same regardless of which EUC band
1b) Banded fee eg.
EUC band 6-8 multiplier = 2
EUC band 5 multiplier = 1.5
EUC band 4 multiplier = 1

5. Example of model 1b – Banded membership fee
23/05/2019
Example of model 1b – Banded membership fee
Assume fee = £10 per eligible meter point
MPR snapshot determines which band at start of UNC 224 rollout
EUC 6-8 would pay:
£10*1 (phase 1) + £10*0.5 (phase 2) +£10*0.5 (phase 3) = £20 total
EUC 5 would pay:
£10*1 (phase 2) + £10*0.5 (phase 3) = £15 total
EUC 4 would pay:
£10*1 (phase 3) = £10 total
Fees set to forecast demand under/over recovery reconciled from all members or all eligible users.

6. 2. Availability fee model
23/05/2019
2. Availability fee model
All eligible meter points pay towards the development cost
DME is made available to all users where EUC 4 and above (subject to rollout) Costs targeted only at those who participate
Fee is not based on forecast take-up (demand)
No risk of under/over recovery
No risk of reconciliation fees if under-recovery
1a) Flat fee – all users pay the same regardless of which EUC band
1b) Banded fee eg.
EUC band 6-8 multiplier = 2
EUC band 5 multiplier = 1.5
EUC band 4 multiplier = 1

7. Example of model 2b – Banded Availability fee
23/05/2019
Example of model 2b – Banded Availability fee
Assume fee = £10 per eligible meter point
MPR snapshot determines which band at start of UNC 224 rollout
EUC 6-8 would pay £10*2 (multiplier) = £20
EUC 5 would pay £10*1.5 (multiplier) =£15
EUC 4 would pay £10*1 (multiplier) =£10
All development costs recovered immediately, no under/over recovery or reconciliation charges for users.

8. Relative merits Membership fee – Model 1 Availability fee – Model 2
23/05/2019
Relative merits
Membership fee – Model 1
Availability fee – Model 2
Objectives 1a
Flat 1b
Banded 2a 2b
Cost reflective
Targeted
Transparent
Confidence