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Decision on changes to ‘Annex 3 – Methodology for determining the Network Cost Allowance’ and the allowance for the Shetland Cross Subsidy in the default tariff cap

In November 2020, we issued two open letters on our proposed changes to the models set out in ‘Annex 3 – Methodology for determining the Network Cost Allowance’ and the allowance for the Shetland Cross Subsidy in the default tariff cap from the sixth charge restriction period. We have now considered stakeholders’ responses and are publishing our decision.

We have decided to proceed with our proposals to update Annex 3 of Standard Licence Condition (SLC) 28AD to accurately reflect recent changes in data inputs. We have also made the decision to proceed with adding an uplift amount in the Assistance for Areas with High Electricity Distribution Costs (AAHEDC) allowance to reflect the addition of the Shetland Cross Subsidy in ‘Annex 4 – Methodology for determining the Policy Cost Allowance’ of SLC 28AD.