Consultation on amendments to the service
model assumptions for Electricity North West’s
Unmetered Supplies tariffs within our Common
Distribution Charging Methodology
Consultation Issue Date: 23rd April 2010
Consultation End Date:
21st May 2010
Table of Contents
1.
INTRODUCTION ................................................................................................................................................ 3
2.
BACKGROUND.................................................................................................................................................. 3
3.
ENW’S UMS TARIFF’S WITHIN CDCM.......................................................................................................... 3
4.
ENW’S SERVICE MODEL ASSUMPTIONS..................................................................................................... 4
5.
ANALYSIS OF SERVICE MODEL ASSUMPTIONS ........................................................................................ 5
6.
REVISED TARIFFS ............................................................................................................................................... 7
APPENDIX 1 ............................................................................................................................................................... 6
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23rd April 2010
1.
INTRODUCTION
1.1
The introduction of the Common Distribution Charging Methodology (CDCM) has
led to a large increase in the Unmetered Supplies (UMS) tariffs for Electricity
North West (ENW) customers. ENW has received a number of queries
regarding this increase and this consultation explains the reasons behind the
increase and allows stakeholders to comment on the assumptions made. This
consultation also proposes a number of amendments to the assumptions which we
believe will make the UMS tariffs more cost reflective.
1.2
This consultation seeks views on the proposal to change the Service Model
assumptions used by ENW for Unmetered Supplies (UMS) tariffs within the
Common Distribution Charging Methodology (CDCM). The CDCM model used to
derive ENW’s tariffs for 2010/11 is available to download from ENW’s website
at www.enwltd.co.uk.
1.3
ENW welcomes views from all stakeholders on proposals to amend the UMS
tariffs. The deadline for responses is 4pm on Friday 21st May 2010. Please
respond by email to [email protected].
2.
BACKGROUND
2.1
The CDCM model produces a p/kWh unit tariff for the UMS customer. For NonHalf-Hourly (NHH) UMS this is a single unit tariff and for Pseudo Half-Hourly
(HH) UMS this is a three unit rate tariff. Prior to the introduction of the CDCM
ENW’s tariff structure for a Demand UMS tariff was a demand charge (kW) and
a fixed charge, and for a Without Demand UMS tariff was a fixed charge with
day and night unit rates.
2.2
Unmetered Supply as defined in Elexon’s BSC Section X-Annex X-1 General
Glossary document “means a supply of electricity to a particular inventory of
Apparatus in respect of which a Licensed Distribution System Operator has issued
an Unmetered Supply Certificate.”
2.3
Unmetered Supply Certificate as defined in ELEXON’s BSC Section X-Annex X-1
General Glossary document “means a certificate issued by a Licensed Distribution
System Operator permitting a supply of electricity to be made on its Distribution
System or Associated Distribution System without the requirement for such supply to
be metered, such a certificate to be agreed between the relevant Licensed
Distribution System Operator and the Customer taking the supply.”
3.
ENW’S UMS TARIFF’S WITHIN CDCM
3.1
The large increase in ENW’s UMS tariffs is driven by the service model
assumptions used within the CDCM. The service model is used within CDCM to
derive the operating expenditure (OPEX) element of the final charge. Table 1
below shows the final UMS tariffs for ENW and the proportion of this cost which
is determined from the OPEX element:
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23rd April 2010
LV UMS (Pseudo HH Metered)
OPEX Charge
Final UMS tariff
OPEX as percentage of final charge
Table 1
3.2
NHH UMS
Unit rate
1 p/kWh
Unit rate 2
p/kWh
Unit rate
3 p/kWh
Unit rate 1
p/kWh
1.997
19.227
1.997
3.079
1.997
2.156
10%
65%
93%
1.997
3.271
61%
The UMS OPEX charge is determined from the service model for a 1MWh supply
of UMS multiplied by the OPEX rate which is DNO specific. The service model
cost used by ENW for the UMS tariff is much higher than that used by other
DNOs. The table below shows the total service model cost used by each DNO
for the final CDCM charges from 1st April 2010. It ranges from £0 to £259 for
other DNOs, but is significantly higher for ENW at £877.
CE - NEDL
CE - YEDL
CN - East
CN - West
SP Distribution
SP Manweb
SSE - SEPD
SSE - SHEPD
WPD - South Wales
WPD - South West
EDFEN - EPN
EDFEN - LPN
EDFEN - SPN
ENW
matrix of applicability
(No. of service models
for 1MWh/year)
0
0
1.522
1.522
0.234
0.234
3.054
2.726
0.488
0.488
1.1
1.1
1.1
3.914
Service Model
Asset Cost (£)
£0
£0
£170
£170
£515
£515
£58
£58
£485
£465
£196
£206
£187
£224
Total service
model cost for
1MWh/year
£0
£0
£259
£259
£121
£121
£177
£158
£237
£227
£216
£227
£206
£877
Table 2
3.3
The CDCM is within Schedule 16 of DCUSA. Section 33 of this schedule relates
to service model costs and states “For each service model, the DNO Party
estimates the number and types of connections that the model covers, and a total
construction cost for the assets in the model”. Section 36 refers to the service cost
for Unmetered supplies and states “In the case of Unmetered supplies, service
model assets are modelled on the basis of units delivered”.
3.4
The CDCM manual specifies that for a UMS service model “the cost should be a
scheme for building and jointing service cables for a typical street lighting
configuration. The percentages in the matrix of applicability are based on 1
MWh/year. For example, if the scheme connects columns with, in total, 10 lamps
of 70W each, burning for 8 hours a day on average, then the total annual
consumption of the scheme is 10 x 70W x 8h x 365 = 2 MWh, the figure in the
relevant cell of table 1026 is 0.50.”.
4.
ENW’S SERVICE MODEL ASSUMPTIONS
4.1
The total service model cost is derived from the matrix of applicability multiplied
by the service model asset cost as shown in table 2 above. In ENW, the normal
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23rd April 2010
method of connection is for each street lamp to be connected directly to ENW’s
network.
4.2
Using the CDCM methodology stated in 3.4 above, the calculation of the matrix
of applicability for ENW service model for April 2010 is derived as follows:
Standard lamp size, watts
Standard lamp size, kW
Days per year
Ave. operating hrs per day
Total operating hrs pa
Consumption per lamp pa
Base consumption for factor
Factor for CDCM table 1026
Table 3
70
0.07
365
10
3650
255.5
1000
3.914
watt
kW
days
hrs
hrs
kWh pa
kWh pa
a
b = a/1000
c
d
e = (c * d)
f = (e * b)
g
= g/f
4.3
The service model cost is based on a 70Watt High Pressure Sodium SON/T
Lamp which is the most popular lamp currently operating in ENW’s area and the
new lamp most likely to be fitted; burning an average of 10 hrs per day. Hence,
a total of 3.914 lamps of this size will produce a total annual consumption of
1MWh.
4.4
The second element of the total service model cost is the service model asset cost.
ENW’s Service Model asset cost is based on the single connection of a lamp or
street furniture and is shown in Appendix 1. A single connection per lamp is
specified in ENW’s Engineering Policy Document - Distribution System Design LV
Network.
4.5
ENW has asked other DNOs what assumptions they have used in their service
model so we can better understand any differences in charges. Whilst not all
DNOs responded, a number of DNOs have informed ENW that they have a
lower total service cost as they loop 5 lamps to one connection. ENW does not
use the looping system to limit the risk arising from having long lengths of small
section service cable which would not effectively be protected against short
circuit by the substation fuses.
5.
ANALYSIS OF SERVICE MODEL ASSUMPTIONS
a) Lamp Wattage
5.1
ENW has undertaken further analysis on the UMS service model assumptions and
has determined a number of options which are detailed below:
5.2
The lamp size used in the service model is 70W. However, under BSCP520, the
total circuit watts for the 70 watt High Pressure Sodium SON/T with standard
gear is 90Watts.
5.3
The total load associated with HH UMS street lighting, including illuminated signs
and bollards, is 7,300,600 watts and the total number of recorded lamps in
ENW’s distribution area is 754,390. This gives an average wattage of 97W.
5.4
Using the total UMS load gives a higher wattage and is a more accurate
assumption of the average wattage. However, the CDCM manual specifies that
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23rd April 2010
the service model should be for a typical street lighting configuration and does
not include illuminated signs and bollards.
5.5
ENW propose to use the 90W wattage as the most up to date number that
complies with the CDCM model.
Q1 – Do you agree with ENW’s proposal to increase the existing 70W lamp wattage
assumption to 90W in line with the total wattage as specified in BSCP520?
Q2 – Do you think ENW should use a lamp wattage value of 97W? This would
comply with schedule 16 of DCUSA, but not with the CDCM user manual.
b) Operating Regime
5.6
The CDCM service model assumption for the operating regime is 10 hours. After
further investigation, ENW has determined that the average operating regime
within ENW’s area is 4,099 hours which equates to 11.23 hours/day.
5.7
ENW propose to amend the UMS service model operating regime assumption to
11.23 hours/day.
Q3 – Do you agree with the ENW proposal to update the operating regime?
c) Service Model Asset Cost
5.8
The ENW total service model cost is higher than other DNOs due to the use of 1
connection per lamp. Other DNOs use a loop of 5 lamps to one connection or a
UMS connection pillar where the lighting authority is responsible for connecting a
number of lamps or other UMS.
5.9
Where DNOs use a pillar to connect up to five streetlights, the service cost is
effectively reduced by 5 as the total cost is similar, but the consumption is
increased fivefold. However, where a lighting authority assumes ownership of
the connection from the pillar to the streetlights, they will incur additional costs in
the maintenance and repair of this line. Therefore it is reasonable for lighting
authorities to incur a lower Use of System charge in respect of these connections
as they will incur addition maintenance costs.
5.10 Where DNOs connect 5 lamps on a loop to one LV connection, a similar situation
occurs. The service model cost is higher, but is spread over the total consumption
of 5 streetlamps, giving a relatively low total service model.
5.11 ENW do not propose to change our method of connecting street lighting.
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23rd April 2010
6.
REVISED TARIFFS
6.1
The tables below shows the current tariffs published in the CDCM April 2010
and the revised tariffs if the proposed amendment was implemented. The
revised tariffs are based on ENW’s current Allowed Revenue.
Tariff
Service Model Cost
Proportion of service model involved in
connecting load of 1 MWh/year
Total Assets Cost
Unit Rate 1 p/kWh
Existing
CDCM
Tariff
Tariff with
updated
assumptions
£224
£224
3.914
£877
3.271
2.711
£607
2.689
% Change
-17.8%
Table 4 – Impact on NHH UMS tariff
Tariff
Service Model Cost
Existing
CDCM
Tariff
£224
Proportion of service model involved in
connecting load of 1 MWh/year
Total Assets Cost
Unit Rate 1 p/kWh
Unit Rate 2 p/kWh
Unit Rate 3 p/kWh
Average Unit Rate (p/kWh)¹
3.914
£877
19.227
3.079
2.156
3.303
Table 5 – Impact on LV UMS (Pseudo HH Metered) tariff
Tariff
with
updated
assumptions
% Change
£224
2.711
£607
18.712
2.497
1.569
2.721
-2.7%
-18.9%
-27.2%
-17.62%
¹ Average Unit rate is calculated as the average of the red, amber and green bands,
weighted by the forecast UMS consumption in each band.
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23rd April 2010
APPENDIX 1
ENW Unmetered Service Model
Unmetered service model
Diagram shows how ENW connect a street light.
Asset Description
Quantity
Service Joint to LV main
1
4mm2 service cable
Excavate & reinstate
10 metres
Street lighting termination
1
Excavate and reinstate joint
hole
1
Cost
Street Lighting
Termination
Ground
Existing LV main
Service
joint to LV
main
4mm2 service cable
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