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Transparency & Predictability

Transparency & Predictability. DCMF. Andy Manning 1 st April 2010. 1. 1. CDCM Transparency and Predictability. All inputs to be fully defined within Methodology Process for updating inputs to be reviewed: Inputs related to assets potentially fixed for length of price control

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Transparency & Predictability

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  1. Transparency & Predictability DCMF Andy Manning 1st April 2010 1 1

  2. CDCM Transparency and Predictability • All inputs to be fully defined within Methodology • Process for updating inputs to be reviewed: • Inputs related to assets potentially fixed for length of price control • Inputs related to customer behaviour converted to a 3-year rolling average • Interaction with other initiatives • Enhancements to DCP30/50 cost information provision • Longer term products • SSE proposal

  3. CDCM Transparency • All inputs to be fully defined with Methodology- to include where relevant: • Data sources • Any preliminary calculations undertaken • Reference periods • Any assumptions made • Settlement Run etc

  4. Load Profile Data- Domestic UR

  5. Load Profile Data- HH LV Network

  6. DRM Data

  7. CDCM Updating process • Some inputs to be fixed for Price Control • Clarity, certainty and simplicity • Elements users least likely to be able to replicate/forecast • ‘Slow-moving’ in nature • Full review around Price Control • Some inputs to be updated on rolling average basis • Need to capture underlying trends but avoid one-offs • Compromise between cost-reflectivity and stability • Remainder updated as currently • E.g. Allowed Revenue • Time bands?

  8. Potential Issues • Fixing asset-based inputs will increase scaling year-on-year • Does the impact of scaling remain appropriate with increasing revenues? • Asset values could be indexed • Inter-related inputs • If inputs are related, can they be updated through differing processes? • Interactive proposals • Will clearly interact with other work

  9. Potential Next Steps • Use Work-stream C to coordinate ‘volatility’ work • Possibly further analysis: • Volatility of inputs • Sensitivity of models • Commonality of inputs • Potential DCUSA changes • Wider solution: • DCP30 development

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