New rules to open up more competition in electricity connections
April 21, 2016
Last autumn saw new rules introduced that will force the owners of the local electricity grids - known as Distribution Network Operators (DNOs) – to open up competition in the electricity connections market. As a leading Independent Connections Provider, Rock Power Connections welcomes the move by the industry regulator and believes that its customers will receive a better quality of service and price thanks to the introduction of a ‘Competition in Connections Code of Practice’.
What is ‘Competition in Connections’?
Previously, only the incumbent DNOs could provide an electrical connection; customers had to accept the local DNO’s price and quality of service. Since competition in electricity connections was introduced in 2000, customers needing an electrical connection to the distribution grid – for example, when building a new development – can choose to use an Independent Connections Provider (ICP) to undertake certain elements of the connection. This element is called the ‘Contestable’ works.
Has ‘Competition in Connections’ worked?
Ofgem has been evaluating whether customers are getting a fair deal and a good service. The regulator reviewed the market in 2014 and concluded that more needed to be done to open up the independent connections market.
In January last year, it stated its concerns: "if competition is not allowed to develop then customers will lose out."
The regulator went on to criticise the local electricity grid owners for restricting competition and delaying the connection process.
To redress the situation, Ofgem introduced a new licence condition for DNOs and requires them to operate under a new ‘Competition in Connections Code of Practice’. This is to reduce the extent to which other service providers in the market, such as Rock Power Connections, depend on them for essential services. The DNOs will now have to provide a level playing field and where they are required to provide services, they must do so on the same basis to both their competitors and their own connections business.
What does this mean for customers?
Rock Power Connections’ Commercial Director, Kev Sankar, explained:
“We believe this new Code of Practice will make a real difference. In the past, we have come up against complicated DNO processes and engineering delays which have had an impact on our customers’ projects.
Now we have clear guidance from Ofgem and more scope to carry-out essential connection works ourselves – meaning we can speed up the process and ensure our customers get a good deal and a quality solution.
This is very good news for our customers.”
What are the key changes?
The Competition in Connections Code of Practice outlines a number of conditions that the DNOs must comply with to simplify the connection process.
CONVERTIBLE QUOTATIONS. When a customer requests a quotation from the DNO for an electrical connection, the DNO must provide a customer with a ‘Convertible Quotation’ which outlines and separates the charges for ‘Non-Contestable’ works and ‘Contestable’ works which an ICP can carry out. This provides the customer with the option to accept the DNO’s quote for the full works or to approach an ICP in order to obtain a competitive quote for the ‘Contestable’ element. The customer is then able to choose between the DNO or an experienced ICP like Rock Power Connections to deliver its new electrical connection or upgrade.
HIGHLIGHTING COMPETITION. Alongside the provision of a convertible quotation, the DNO must now provide customers with a list of its competitors - accredited Independent Connections Providers like Rock Power Connections - and an explanation of the competitive connections market. This heightened level of transparency will hopefully encourage more customers to seek a competitive quote and possibly save time and money on their electrical connection project.
COMPARABLE NON CONTESTABLE CHARGES. Regardless of whether the DNO or ICP undertake the ‘Contestable’ works, the charge for the ‘Non Contestable’ element – which only the DNO can do – must be comparable. This makes it easier for the customer to compare quotations and choose the best solution for them.
SELF DETERMINATION OF THE POINT OF CONNECTION. Under the new rules an Independent Connections Provider can determine the ‘Point of Connection’ themselves. This is the point on the DNO’s existing system where the customer’s new network will connect to. Most DNOs have a lead time of 20 days for providing a Point of Connection, so giving the ICP the ability to identify this themselves will speed up the design and quotation process.
FINAL CONNECTION. DNOs will facilitate the provision and registration of MPANs. Again, this will help to ensure energisation deadlines are met.
ICPs CAN UNDERTAKE MORE CONSTRUCTION WORKS. Certain construction works which previously DNOs could only undertake can now be completed by ICPs, subject to accreditations.
SELF-APPROVAL OF DESIGN. By 30 April ‘16, measures must be in place to give the opportunity for Rock Power Connections and other ICPs to carry out its own design approval of an electrical connection. And where DNO approval is needed, it should not delay ICPs carrying out work on behalf of their customers – speeding up the process and avoiding any unnecessary delays.
Overall, good news for customers
Kev added: “We are hopeful that the ‘Competition in Connections Code of Practice’ will make a real difference to our customers. As a fully-accredited Independent Connections Provider, we have the capability, skills and the authorisations needed to carry out all of the additional services that are now open to ICPs.
Our customers will get real additional value from our engineering team, and with our considerable experience and know-how, we are committed to making the electrical connection process as simple and hassle-free as possible.”
How to make the most of competition
To ensure you receive the best service at the best price, Rock Power Connections recommends connection customers follow these four critical steps:
Contact a reputable, fully authorised ICP as soon as you understand your project needs. Rock Power Connections are connection specialists and are able to work on the most complex or simple connection projects. We offer a free, no obligation quote and advice.
Rely on your ICP to manage the process and provide peace of mind. Rock Power Connections will take the stress out of the process by managing the DNO interface on your behalf.
Challenge your quote. A leading ICP like Rock Power Connections will provide you with a competitive quote which includes the ‘Non-Contestable’ works. If we think the cost for the ‘Non-Contestable’ works does not seem fair, we will happily review and challenge the DNO on your behalf.
Manage your costs. Unlike the DNOs, Rock Power Connections offer a staged payment scheme to ease your cash flow.
Let Rock Power Connections help you
Rock Power Connections supports all of its customers through the connections process and is on hand to offer expert advice from the very first enquiry. We’re proud of our multi-skilled expert team and believe we have the know-how and experience for your connections challenge.
Rock Power Connections offer:
Competitive prices with staged payments
Flexible install to suit you and your project
Free, no obligation quote and advice
Friendly expert team and multi-skilled engineers
Dedicated Project Manager for a reliable point of contact
Hassle free solution – we deal with the DNO
Expert partner on site from initial design to final switch-on