Modification of the WTL Gas licence to facilitate pre-construction financing

Published: 28 March 2018

Consultation opened on 28 March 2018. Consultation closed 27 April 2018.

Summary

The Utility Regulator publishes today its consultation on modifications to the gas conveyance licence held by West Transmission Limited to facilitate pre-construction financing of the network

The proposed modifications are in particular:

Amend the process by which the capital allowance for constructing the Gas to the West network extension will be determined.

Limit the period over which SGN can earn returns on their investment in the network to 21 months after the First Operational Commencement Date.

Provide a return of 5.3% (real) to the £50m of capital allowance that relates to the PE (polyethylene) intermediate pressure pipeline section of the network extension, while retaining the return of 1.98% (real) for the steel high pressure section of the network.

Revise the calculation of Required Revenue to take account of the proposed method of raising the required finance.

Introduce the concept of an Adverse Regulatory Event into the licence and amend the definition of Eligible Pass-Through Costs to provide financiers with greater certainty as to the costs so categorised.

The Consultation Document and Annexes can be accessed below.

Consultation Document

Annex 1

Annex 2

Annex 3

Annex 4

Any representations or objections with respect to the proposed modifications may be made on or before 12.00 noon on 27 April 2018 to: