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UMS Working Group update

UMS Working Group update. 4 August 2011. Andrew Pace UMS Working Group Chair. 1 | Energy Networks Association - DCMF. UMS Working Group. 4 August 2011. 2 | Energy Networks Association – DCMF. Set up in April 2011 to look at 2 issues:

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UMS Working Group update

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  1. UMS Working Group update 4 August 2011 Andrew Pace UMS Working Group Chair 1 | Energy Networks Association - DCMF

  2. UMS Working Group 4 August 2011 2 | Energy Networks Association – DCMF • Set up in April 2011 to look at 2 issues: • Introduction of 4 new tariffs to replace NHH UMS single rate • Continuous • Dusk to Dawn • Half night • Dawn to Dusk • Remove the discrepancy between NHH and HH charges

  3. Introduction of 4 new NHH tariffs 4 August 2011 3 | Energy Networks Association – DCMF • Need to produce coincidence factors & load factors for each profile • Data available from Meter Operator • Change to CDCM was modelled and assessed • Discrepancy between NHH and HH UMS tariffs was exaggerated by the introduction of the 4 tariffs • Conclusion: re-look at this issue when NHH/HH discrepancy has been resolved

  4. UMS HH/NHH Discrepancy 4 August 2011 4 | Energy Networks Association – DCMF • Reason for Discrepancy: • NHH tariffs derived based on coincidence factors & load factors • HH tariffs derived from peaking probabilities • The different approaches are reconciled to some extent using a coincidence correction factor • Pricing discrepancy also exists for PC 5-8, but its larger for UMS because there is no capacity charge.

  5. UMS HH/NHH Discrepancy 4 August 2011 5 | Energy Networks Association – DCMF • Possible Solutions: • 11 ideas considered (plus some combinations of the 11) • Preferred Option – to remove the HH tariff which is considered less cost reflective than the NHH tariff due to the seasonality of UMS • However, issue with load shedding UMS meant this idea does not better meet licence conditions. • Other options considered: • Introducing seasonality by creating a new timeband • Introducing a capacity charge • Derive NHH tariffs directly from HH tariffs

  6. UMS HH/NHH Discrepancy 4 August 2011 6 | Energy Networks Association – DCMF • A number of solutions tried to address the fundamental reason behind the discrepancy • These solutions looked at using the same methodology to derive HH and NHH tariffs. • These options were discounted because they had a big impact on other tariffs, not just UMS. • UMS group agreed that these options would offer a more enduring solution to the NHH/HH discrepancy issue

  7. UMS Group – Next Steps 4 August 2011 7 | Energy Networks Association – DCMF • The UMS group submitted a final paper to MIG on 24th June. • Recommended that the NHH/HH discrepancy should be addressed by using a consistent methodology for deriving NHH and HH prices. • A new working group will be set up to examine this issue • The decision was taken to set up a new group to allow any interested party to participate, as the impact could be large on some tariffs. • The options considered and documented by the UMS group will be evaluated by the new working group.

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