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UK GAS DISTRIBUTION DN Charging Methodology Forum NGGD Oct-14 Mod0186 Dave Chalmers / Mike Lapper
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UK GAS DISTRIBUTION
DN Charging Methodology Forum
NGGD Oct-14 Mod0186 Dave Chalmers / Mike Lapper
UK GAS DISTRIBUTION
Headline Movement Since July-14 Report
• 2015/16 distribution charges lower than previously forecast across all networks
• Reduced customer bill impact in 2015/16, remaining relatively flat in future years
as previously stated
EoE
NL
NW
WM
UK GAS DISTRIBUTION
Forecast Revenue - Main Drivers of Change
• RPIFt – August HM Treasury report forecasts lower RPI in 2014, higher in subsequent years to 2018
• PCFM iteration adjustment – Value of MODt reduced to reflect modelling change to legacy adjustment
• SOQ – Annual October SOQ reduction less than anticipated. Revised forecast for future years from 3% to 2.5% (av.) based on latest historical SOQ average changes
UK GAS DISTRIBUTION
East of England NetworkPrice Control Financial Model Iteration Adjustment MODt
RPI True Up TRUt
Pass Through PTt
Correction Term revenue Adjustment (K added) Kt
Maximum DN Allowed Revenue (including NTS Exit) ARt
Collectable Revenue (including NTS Exit) Rt
NTS Exit Capacity Revenue Adjustment EXt
Under/Over-Recovery Carried Forward (including NTS Exit) Rt - ARt
Total Distribution Charges Arithmetical April Price Change (%) movement
Movement
2014-15 2015-16 2016-17 2017-18 2018-19
- -0.3 -0.3 -0.3 -0.2
- - -0.9 -0.0 -0.0
- 0.0 0.1 0.1 0.1
- -0.0 0.1 0.0 -0.1
- -2.8 0.1 -
2.7 -0.2 -2.0 3.8 4.7
2.7 -0.1 - - -
- -0.0 -2.0 3.8 4.7
0.0% -1.7% -1.2% 0.0% -0.8%
July-14 Total Distribution Charges Price Change (%)
Oct-14 Total Distribution Charges Price Change (%)
-0.4% 5.8% 4.5% 7.8% 5.1%
-0.4% 4.1% 3.3% 7.8% 4.3%
SOQ reduction movement (%) (smaller reduction than prev. forecast) 0.5% 0.8% 0.8% 0.8% 0.8%
• Indicated price change for April 2015 is slightly lower than previous forecast due
to movement in RPI, modelling update to MODt and smaller reduction in
aggregate peak load.
UK GAS DISTRIBUTION
North London NetworkPrice Control Financial Model Iteration Adjustment MODt
RPI True Up TRUt
Pass Through PTt
Correction Term revenue Adjustment (K added) Kt
Maximum DN Allowed Revenue (including NTS Exit) ARt
Collectable Revenue (including NTS Exit) Rt
NTS Exit Capacity Revenue Adjustment EXt
Under/Over-Recovery Carried Forward (including NTS Exit) Rt - ARt
Total Distribution Charges Arithmetical April Price Change (%) movement
Movement
2014-15 2015-16 2016-17 2017-18 2018-19
- -1.3 -1.3 -1.2 -1.6
- - -0.6 -0.0 -0.0
- 0.0 0.1 0.1 0.1
- -0.0 0.0 -0.0 -0.1
- -2.1 -0.0 -
2.0 -1.3 -2.9 1.2 1.3
2.0 0.0 - - -
- -1.4 -2.9 1.2 1.3
0.0% -2.7% -1.0% 0.3% -0.6%
July-14 Total Distribution Charges Price Change (%)
Oct-14 Total Distribution Charges Price Change (%)
0.1% 11.3% 5.9% 2.2% 7.8%
0.1% 8.5% 4.9% 2.5% 7.2%
SOQ reduction movement (%) (smaller reduction than prev. forecast) 1.3% 0.6% 0.6% 0.6% 0.6%
• Indicated price change for April 2015 is slightly lower than previous forecast due
to movement in RPI, modelling update to MODt and smaller reduction in
aggregate peak load.
UK GAS DISTRIBUTION
North West NetworkPrice Control Financial Model Iteration Adjustment MODt
RPI True Up TRUt
Pass Through PTt
Correction Term revenue Adjustment (K added) Kt
Maximum DN Allowed Revenue (including NTS Exit) ARt
Collectable Revenue (including NTS Exit) Rt
NTS Exit Capacity Revenue Adjustment EXt
Under/Over-Recovery Carried Forward (including NTS Exit) Rt - ARt
Total Distribution Charges Arithmetical April Price Change (%) movement
Movement
2014-15 2015-16 2016-17 2017-18 2018-19
- -1.7 -1.6 -1.4 -1.3
- - -0.7 -0.0 -0.0
- 0.0 0.1 0.1 0.1
- 0.0 0.1 0.0 -0.1
- 0.2 0.0 -
-0.2 -1.9 -1.0 1.1 1.7
-0.2 -0.0 - - -
- -1.9 -1.0 1.1 1.7
0.0% -0.8% 0.4% 0.6% 0.3%
July-14 Total Distribution Charges Price Change (%)
Oct-14 Total Distribution Charges Price Change (%)
-1.4% 8.2% 6.6% 2.9% 5.9%
-1.4% 7.4% 7.0% 3.5% 6.2%
SOQ reduction movement (%) (smaller reduction than prev. forecast) -0.2% -0.1% -0.1% -0.1% -0.1%
• Indicated price change for April 2015 is lower than previous forecast due to
modelling update to MODt and small movement in RPI.
UK GAS DISTRIBUTION
West Midlands NetworkPrice Control Financial Model Iteration Adjustment MODt
RPI True Up TRUt
Pass Through PTt
Correction Term revenue Adjustment (K added) Kt
Maximum DN Allowed Revenue (including NTS Exit) ARt
Collectable Revenue (including NTS Exit) Rt
NTS Exit Capacity Revenue Adjustment EXt
Under/Over-Recovery Carried Forward (including NTS Exit) Rt - ARt
Total Distribution Charges Arithmetical April Price Change (%) movement
Movement
2014-15 2015-16 2016-17 2017-18 2018-19
- -0.9 -0.9 -0.9 -0.8
- - -0.5 -0.0 -0.0
- 0.0 0.1 0.1 0.1
0.0 0.0 -0.0 -0.1
- -1.0 0.1 -
1.0 -1.0 -1.6 1.1 1.6
1.0 -0.1 - - -
- -0.9 -1.6 1.1 1.6
0.0% -1.8% -0.9% 0.1% -0.5%
July-14 Total Distribution Charges Price Change (%)
Oct-14 Total Distribution Charges Price Change (%)
2.6% 2.7% 6.3% 8.7% 5.2%
2.6% 0.8% 5.5% 8.8% 4.6%
SOQ reduction movement (%) (smaller reduction than prev. forecast) 1.4% 0.6% 0.6% 0.6% 0.6%
• Indicated price change for April 2015 is slightly lower than previous forecast due
to movement in RPI, modelling update to MODt and smaller reduction in
aggregate peak load.
