Upfront charges imposed on new grid applications

New upfront fees for electricity grid applications are set to be introduced this year in a bid to stop speculative connection requests and spread the costs more fairly.

Under plans outlined in a government consultation last autumn, Distribution Network Operators (DNOs) will be able to charge in advance for the “assessment and design” (A&D) costs incurred when processing new connection applications, regardless of whether a grid offer is accepted.

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Costs typically incurred by DNOs processing grid applications include staff, undertaking surveys, site visits, drawing plans, accommodation and equipment.

Currently the A&D charge is only payable when a grid connection offer is accepted and is usually built into the initial payment (grid deposit).

Customers who accept a connection offer are therefore also covering the A&D costs incurred by DNOs in providing offers that are not accepted.

It is hoped that the upfront charge will more fairly share the cost of new connections, prevent multiple speculative connection requests and free-up spare capacity allocated to customers that do not take it up.

The consultation document says changes will come into effect in either April or October, once details of the new rules have been formally agreed by Parliament.

The consultation can be viewed on the government’s website (PDF).

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