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Ofgem to consult on DUoS charge timeline in light of RIIO-ED2

Ofgem will consult on the impact of the incoming RIIO-ED2 period on DUoS charge notification periods. Image: Getty.

Ofgem will consult on the impact of the incoming RIIO-ED2 period on DUoS charge notification periods. Image: Getty.

Ofgem has launched a consultation into temporarily changing the current distribution use of system (DUoS) charge notification periods.

The distribution network operators (DNOs) called for a formal direction to disapply these notice periods for 2023 and 2024, the first two years of the upcoming RIIO-ED2 price control period.

The DNOs had raised concerns that under the current 15 month notice period they would have to set prices for the 2023/24 period as well as potentially the 2024/25 period before final determinations on allowed revenues under RIIO-ED2 were published.

The final determinations on allowed revenues under RIIO-ED2 are expected to be published at the end of 2022. If significant corrections will then be needed following this, it could increase price volatility along with some other associated risks.

As such, Ofgem is consulting on the possibility of operators publishing DUoS charges with 60 days' notice or 20 working days after the final determinations on the RIIO-ED2 plans are published.

Additionally, DNOs would publish DUoS charges for 2024/25 with at least three months' notice, and before 31 December 2023.

The consultation follows the Energy Networks Association writing to Ofgem in May on behalf of the DNOs, with a paper submitted in February.

The DNOs published their draft business plans for the upcoming RIIO-ED2 price period at the beginning of the month, highlighting the need for further investment to deliver smarter, decarbonised networks capable of managing increased capacity along with the growth of electrified solutions for heating and transport.

Ofgem has invited responses from all interested parties – stating it is aware changes to the DUoS charges timeline may have implications on the directions sought by DNOs for other stakeholders – and set a closing date of 9 August 2021 for responses.

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