CMP474 Connection and Use of System Code (CUSC) urgency decision

What changed

Ofgem has granted urgency status to CMP474, a CUSC modification proposal raised by NESO on 14 April 2026 that would introduce a reset mechanism for the fixed BSUoS tariff. The CUSC Panel unanimously endorsed urgency on 21 April, and Ofgem accepted on 29 April. Urgency compresses the standard modification timeline from several months to weeks, meaning this will reach a final decision before the current BSUoS charging period ends.

The proposal is a direct response to balancing cost volatility. BSUoS charges are currently set as fixed tariffs over defined periods, which means NESO bears the volume risk: if actual balancing costs diverge from the tariff, NESO over- or under-recovers. CMP474 would allow NESO to reset the fixed price mid-period when actual costs diverge materially from the tariff assumption.

What this means in practice

BSUoS is levied on all transmission-connected generators and suppliers. It recovers the costs NESO incurs balancing the electricity system: constraint payments, frequency response, reserve, and the spread between accepted bids and offers in the Balancing Mechanism. For the current charging year (2026/27), the fixed BSUoS tariff was set based on NESO's forecast of these costs. That forecast is now, by implication, materially wrong. NESO would not seek urgency for a theoretical problem.

The direction of the error matters but is not stated in the decision letter. If balancing costs are running above the fixed tariff, NESO is under-recovering and building a deficit that would need to be clawed back in the next period, creating a spike. If costs are running below, NESO is over-recovering, meaning generators and suppliers are paying more than actual system costs. Either way, the fixed tariff is no longer tracking reality closely enough for NESO to wait for normal governance.

A reset mechanism changes the risk allocation. Under the current fixed tariff, NESO absorbs forecast error and market participants get charge certainty for the period. Under CMP474, that certainty is reduced. Generators and suppliers would face mid-period tariff changes, making BSUoS less predictable. Suppliers will pass through to consumers. Generators, particularly those with fixed-price PPAs or CfDs where BSUoS is not a pass-through, absorb the volatility directly.

The practical effect depends on reset frequency and trigger thresholds, neither of which are specified in the urgency decision. The key design questions are: how far must actual costs diverge from the tariff before a reset is triggered? How often can resets occur? What notice period do liable parties get before a new tariff takes effect? These parameters determine whether CMP474 is a minor true-up mechanism or a return to something closer to the old half-hourly BSUoS regime that was replaced precisely because of its volatility.

This is worth watching for anyone exposed to transmission-level charges. BSUoS is not a large charge relative to TNUoS or wholesale energy, but its volatility was the reason it was fixed in the first place (CMP361, implemented April 2023). CMP474 partially reverses that reform. The question is whether the cure for forecast error (mid-period resets) reintroduces the disease (charge unpredictability) that the fixed tariff was designed to treat.

What happens next

Urgency status means the modification will follow a compressed timetable. The typical urgent CUSC modification process runs roughly as follows:

- Workgroup convenes within days of urgency being granted, develops the proposal and any alternatives - Code Administrator consultation runs for a shortened period (often 5-10 working days rather than the standard 15-20) - Workgroup report submitted to the CUSC Panel - Panel recommendation to Ofgem - Ofgem decision within days of receiving the Panel recommendation

The entire process from urgency grant to final decision typically completes within 4-8 weeks. Given urgency was granted on 29 April, a final Ofgem decision is plausible by late May or June 2026, with implementation potentially within the current BSUoS charging period.

Three things to watch. First, the workgroup alternatives: NESO's original proposal may not be the version Ofgem ultimately approves. Alternative modifications could propose different trigger thresholds, reset frequencies, or notice periods. Second, the consultation responses: generators and suppliers who benefit from charge certainty will push back against frequent resets, while those who think the current tariff is too high will support closer tracking of actual costs. Third, the underlying driver: the urgency signals that balancing costs are diverging significantly from forecast, which raises a separate question about what is driving that volatility, whether it is constraint costs, interconnector flows, or something structural in the Balancing Mechanism.

The decision letter is available on Ofgem's website. The full modification proposal and workgroup materials will be published on NESO's CUSC modification register as CMP474.