New charges for getting an electrical connection offer from the Distribution Network Operators

The Electricity (Connection Offer Expenses) Regulations 2018

The introduction of new charges to obtain a Point of Connection offer for your electrical connection can be confusing. To give you a helping hand, the Rock Power Connections team have compiled a list of questions to guide you through the impact on your electrical connection and the options you have to obtain a quotation.

WHAT IS HAPPENING?

When you need a new electricity supply, you need to apply to the regional Distribution Network Operator (DNO) to identify where you can connect to their network, and how much it will cost to do so.

From the 6th April 2018, all Distribution Network Operators have the right to charge for the work involved in providing you with a ‘Point of Connection’ (PoC). This covers their associated costs with network assessment, planning, design and quoting and is usually rolled into the term ‘Assessment & Design Charges’.

There is a difference between how each DNO is implementing the regulations.

WHAT DOES IT MEAN IN BASIC TERMS?

The DNO can charge you to get a quote, whether you accept it or not.

HOW MUCH WILL IT COST?

There are three key factors affecting the scale of the upfront charge:

- Where in the country you need the electrical connection, and therefore who your Distribution Network Operator (DNO) is

- Whether you are connecting a demand or generation load; essentially whether you are purely taking from the grid or exporting back onto it

- Which network you are connecting to; Low Voltage (LV), High Voltage (HV) or Extra High Voltage (EHV)

Each DNO has defined their own principles for which of these combinations they charge for and how much.

(There is a really handy website to identify who the DNO is, using the postcode of your site)

An outline of each DNO’s approach is at the end of this article.

WHEN DO I PAY?

Upon receipt of your PoC application, the DNO will invoice you the relevant charge. You have a 14-day cooling off period, during which time you can cancel your request. You will not receive a PoC offer without payment being made.

WHAT IF I NEED TO UPGRADE MY EXISTING CONNECTION?

If you have an existing connection to your site, but need additional capacity, the DNO will treat this as a new connection. The same charges will apply.

As you cannot have two connections into the same premise, you will also need to arrange the disconnection of the existing supply.

Get in contact with the Rock Power team and we will be more than happy to talk through your options.

WHAT ARE YOUR OPTIONS?

1. Ballpark costing from Rock Power Connections

If you are at a very early stage of development or want to consider your options, Rock Power Connections can provide you with a ballpark costing that you can use for budget purposes. We can evolve this into an indicative quotation as your project advances.

2. DNO offer

You can apply to the DNO and pay for a Point of Connection (PoC) offer. Upon receipt, you can then seek alternative quotations from Independent Connection Providers, like Rock Power Connections.

If there are any subsequent changes to your requirements (increased supplies or load, or export from solar photovoltaics (PV)) or your offer expires, you will need to reapply for a PoC offer and pay additional charges.

3. Indicative quotation from Rock Power Connections

You can seek an indicative quotation from Rock Power Connections, without any upfront cost.

This will design your electrical connection from an assumed PoC. When you are ready to proceed with your connection, you can apply for a DNO PoC offer (or we will do it for you) and only incur the charges once.

If the PoC does differ to our assumed location (9/10 times we guess correctly), then this should be a minor change to the quotation.

4. Firm quotation from Rock Power Connections

If you are ready to proceed or need power in a hurry, we can apply to the DNO for a PoC offer for you and prepare a firm quotation ready for acceptance. This takes away all the hassle of you dealing with the DNO and we will only pass through the DNO’s PoC application charge with no additional fee for our efforts.

HOW LONG IS MY POINT OF CONNECTION OFFER VALID FOR?

The validity period differs by DNO, but it will be stated within your quotation. It can be as little as 30 days but is more commonly 90 days or 180 days.

If capacity within the area is restricted and multiple applications are received, the DNO will write and inform you that your offer has become ‘interactive’, stating a defined date by which you must respond if you wish to accept the offer. This can be as little as 10 days.

WHAT IF MY POINT OF CONNECTION OFFER EXPIRES?

Some DNOs have produced more detailed guidance than others. Those operating a widespread, charging regime have provided clear answers.

For example, NPG state that “Where you submit a subsequent request which is the same as previous, you will be charged 75% of the fee. Where there are differences, you will be charged in full.”

We’d suggest this is likely to be a common approach.

IS THERE A DIFFERENCE IN THE CHARGE IF THE DNO PROVIDES A POC (NON-CONTESTABLES ONLY) OR A FULL OFFER (NON-CONTESTABLES AND CONTESTABLES)?

It depends upon the DNO. Some have a flat charge; others differentiate between a PoC-only and a full offer; others differentiate for a budget estimate.

An outline of each DNO’s approach is at the end of this article.

DO THE DNOS APPLY EXACTLY THE SAME CHARGE REGARDLESS OF WHO APPROACHES THEM FOR THE POC OFFER? IS THERE A DIFFERENCE IN THE CHARGE IF IT IS THE DIRECT CLIENT OR A THIRD PARTY LIKE AN ICP OR CONSULTANT?

The same charges apply regardless of who applies.

WHAT IF MY REQUIREMENTS CHANGE?

Some DNOs have produced more detailed guidance than others. Those operating a widespread, charging regime have provided clear answers.

For example, NPG state that “Where you submit a subsequent request which is the same as previous, you will be charged 75% of the fee. Where there are differences, you will be charged in full.”

We’d suggest this is likely to be a common approach.

WHAT IF I WANT TO CONSIDER MULTIPLE OPTIONS?

Once again, some DNOs have produced more detailed guidance than others.

For example, NPG state that “for multiple options of the same site, you will be charged 75% of the fee for additional options.”

We’d suggest this is likely to be a common approach.

WHAT IF I ASK MULTIPLE COMPANIES TO QUOTE FOR ME?

If you obtain a PoC offer from the DNO (and pay the charges), you can then issue this to alternative providers for quotation.

If you ask multiple consultants or alternative providers (Independent Connection Providers) to apply on your behalf, you will be charged multiple times. Some DNOs have produced more detailed guidance than others on what these charges will be.

For example, NPG state that “for ICPs, if an application is the same as one received previously, it will be charged at 75% of the fee.”

WHAT IF A DNO DOES NOT CHARGE UPFRONT FOR MY CONNECTION?

For the cases where a DNO is not introducing an upfront charge for a PoC offer, the existing process will apply whereby a charge is included in the quotation and payable upon acceptance only.

In this situation, you only pay if you accept.

Some DNOs are charging for all connections; others only for EHV or for generation connections. In the case of the latter, the DNO would follow the existing process for all other LV, HV and demand offers.

An outline of each DNO’s approach is at the end of this article.

WHAT IS THE LEGISLATION BEHIND THIS?

The Electricity (Connection Offer Expenses) Regulations 2018 make provision for the DNOs to charge for the cost of providing the electricity connection offer. The requirement is for all ‘applicants’ and applies whether or not the electricity connection offer is subsequently accepted or not.

CURRENT PROPOSALS FOR EACH DNO

Electricity North West (ENW)

From the 4th May 2018, ENW will be applying fees to 33kV and 132kV connections and intend to roll it out to other connections at a later, undefined date.

- The upfront charge for these is £1,000 with a balance of £20,200 on acceptance and £15,800 for a PoC-only acceptance (where an Independent Connections Provider would do the contestable works).

- They have stated they are NOT charging for budget estimates or minor connections (1 to 4 properties), but will charge for LV, HV and EHV demand and generation offer and for requotes. They have published a matrix approach to charges (with a range from £120 to £4,980), suggesting that this will come into force in the near future.

Northern Powergrid (NPG)

From the 6th April 2018, NPG will be applying fees across all connections (both generation and demand at all voltages) using a comprehensive, yet complicated matrix of charges.

- The upfront charge ranges from £190 to £7,880.

- They do not seem to split between a full offer and a non-contestable only offer, but do have separate costs for a budget estimate. However, you would not be able to accept a budget estimate and would then need to proceed with obtaining a full quotation.

ScottishPower Energy Networks (SPEN)

SPEN do not seem to have currently published any guidance.

Scottish and Southern Electricity Networks (SSE)

From the 16th April 2018, SSE will be applying fees to generation projects over 50kW which connect to HV or EHV. SSE intend to roll out charges to other connections at a later, undefined date.

- This covers both the Southern and Scottish domains.

- The upfront charge ranges from £370 to £2,556.

- The charges do differ between a full offer and a non-contestable only offer.

UK Power Networks (UKPN)

From the 23rd April 2018, UKPN is trialling the process in the Distributed Generation market segments for EHV and HV.

- The upfront charge ranges from £1,790 to £9,740.

- The charges do differ between a full offer and a non-contestable only offer.

Western Power Distribution (WPD)

From the 1st May 2018, WPD is charging for generation and demand connections at EHV.

- The upfront charge ranges from £2,572 to £6,740.

- The charges do differ between a full offer and a non-contestable only offer.

For more information on getting an electrical connection offer from the Distribution Network Operators, or to discuss this Q&A in more detail, please contact Emma on 01905 456384 or emma.cj@rockpowerconnections.co.uk.

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