Managing the effects of surplus residual charges: derogation requests and directions

Managing the effects of surplus residual charges: derogation requests and directions | Ofgem Please enable JavaScript in your web browser to get the best experience. BETA This site is currently in BETA. Help us improve by giving us your feedback . Close alert: Managing the effects of surplus residual charges: derogation requests and directions Publication type: Decision Publication date: 6 February 2025 Last updated: 26 February 2026 Topic: Electricity distribution Show all updates Print this page Related links Managing the effects of surplus residual charges guidance Distribution Use of System Charging – Managing the effects of surplus residual charges call for input Share the page Share on Facebook Share on Twitter Share on LinkedIn These are our directions to manage excessive residual surplus in DUoS charging methodologies. We have developed them through our call for input and they follow the Managing the effects of surplus residual charges guidance . We published guidance in 2024 about addressing excessive surplus residuals for the charging year 2026 to 2027. Two Distribution Network Operators (DNOs) also had issues with excessive surplus residuals, when setting 2027 to 2028 tariffs. You can view the relevant derogation requests and directions for 2027 to 2028 tariffs on this page. We have followed the same steps as outlined in the 2024 guidance. Derogation requests from the DCUSA 15-month Notice period and our resultant directions The requests are part of what we ask Distribution Network Operators (DNOs) to do to manage the effects of surplus residual charges. About the derogation requests We asked DNOs to request derogations against the 15-month notice period when they identify a risk of an excessive surplus residual. This relates to Distribution Use of System charging methodologies. This was to allow time for DNOs to: confirm the presence of an excessive residual surplus in their charging methodologies apply the relevant intervention option produce an impact assessment submit a request to derogate against the DCUSA charging methodology to Ofgem View the requests to derogate from the DCUSA 15-month notice period and Ofgem decisions on this page. Derogation requests from the DUoS charging methodologies The requests are part of what we ask Distribution Network Operators (DNOs) to do to manage the effects of surplus residual charges. About the derogation requests We asked DNOs to request derogations against the relevant charging methodologies if they identify an excessive negative residual. This relates to either or both charging methodologies. We asked that requests included: confirmation of the presence of an excessive residual surplus in their charging methodologies confirmation of the applied intervention option impact assessment Impact on LDNOs Allowing Distribution Network Operators to deviate from their 15-month notice period impacts Licensed Distribution Network Operators (LDNOs) operating within those areas. Because of this, we have directed LDNOs to deviate from the 14-month notice period for setting Distribution Use of System charges. This will enable them to publish their final DUoS charges for the charging year 2026 to 2027 in areas affected by an excessive surplus residual. This direction is solely a result of the instructions we have already issued to 3 DNOs, permitting a delay in the publication of their charges. You can view the LDNO directions on this page. Main document LDNOs Direction to derogate DCUSA Notice Period 2027 to 2028 [PDF, 248.66KB] SSEN Direction to Derogate EDCM 2027 to 2028 [PDF, 166.02KB] SSEN Direction to derogate DCUSA Notice Period 2027 to 2028 [PDF, 231.39KB] SSEN Derogation Request EDCM 2027 to 2028 [PDF, 163.89KB] WMID Derogation request notice periods 2027 to 2028 [PDF, 266.77KB] WMID Derogation Request EDCM 2027 to 2028 [PDF, 158.92KB] EMID Derogation request notice periods 2027 to 2028 [PDF, 266.91KB] EMID Derogation Request EDCM 2027 to 2028 [PDF, 268.69KB] NGED Direction to derogate DCUSA Notice Period 2027 to 2028 [PDF, 236.55KB] SSEN Derogation request notice periods 2027 to 2028 [PDF, 149.47KB] ENWL Notice period derogation request.pdf [PDF, 200.02KB] ENWL Direction to derogate DCUSA Notice Period.pdf [PDF, 174.54KB] SSEN Notice period derogation request.pdf [PDF, 97.48KB] SSEN Direction to derogate DCUSA Notice Period.pdf [PDF, 183.76KB] UKPN Notice period derogation request.pdf [PDF, 160.46KB] UKPN Direction to derogate DCUSA Notice Period.pdf [PDF, 181.53KB] LDNOs Direction to derogate DCUSA Notice Period.pdf [PDF, 136.45KB] ENWL Derogation Request CDCM.pdf [PDF, 194.52KB] ENWL Direction to Derogate CDCM.pdf [PDF, 136.00KB] UKPN LPN Derogation Request CDCM.pdf [PDF, 128.42KB] UKPN LPN Direction to Derogate CDCM.pdf [PDF, 137.55KB] SSEN Derogation Request CDCM and EDCM [PDF, 138.10KB] SSEN Direction to Derogate CDCM and EDCM [PDF, 155.22KB] NGED Direction to Derogate EDCM 2027 to 2028 [PDF, 172.54KB] Print this page Related links Managing the effects of surplus residual charges guidance Distribution Use of System Charging – Managing the effects of surplus residual charges call for input Share the page Share on Facebook Share on Twitter Share on LinkedIn All updates 26 January 2026 added notice period derogation request and directions to derogate for 2027 to 2028. 28 January 2026 added notice period derogation request and directions to derogate for 2027 to 2028. 8 January 2026 added notice period derogation requests and directions to derogate for 2027 to 2028. 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