CMA Costs and K term amendment consultation paper published

28 March 2018

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This Article14 (2) Notice and Licence Modification Consultation sets out the Utility Regulator’s (UR’s) proposed changes to the TSO licence held by SONI. The modifications are being proposed in order to provide clarity on SONI's maximum core SSS/TUoS revenue, following the CMA Cost Order and to implement a change to the K-term to ensure continuity between price controls.

There are two modifications which are consequential upon the CMA Cost Order:

1. Exclusion of SONI's costs incurred in relation to the CMA appeal from the 50:50 cost risk share mechanism;

2. An explicit provision for SONI to make a claim to the UR to recover from customers any fees payable by it in Relevant Year t under Condition 8 of the transmission Licence (such fees may include, among other things, UR costs relating the CMA appeal).

It also proposes to modify the licence within Annex 1 paragraph 2.2 to enable the K term (KTSOt) adjustment to bridge between price control periods.

The UR welcomes responses by 5pm on Friday 27 April 2018.