CMP375: Enduring Expansion Constant & Expansion Factor Review
What is being proposed
Seeks to amend the calculation of the Expansion Constant & Expansion Factors to better reflect the growth of and investment in the National Electricity Transmission System (NETS)
Current status
The Panel met on 26 April 2019 and agreed that it goes to a Workgroup. Workgroup meetings commenced on 5 September 2019. This was de-prioritised by Panel whilst the Modifications to address Ofgem's Targeted Charging Review decision were being progressed. November 2020 Panel agreed to move CMP315 from “Low to Medium” to “High” in light of recent developments re: the Expansion Constant. ESO's modification re: the wider solution on the Expansion Constant (CMP375) was presented to the June 2021 Panel. Panel agreed that CMP315 will be progressed in parallel with CMP375 (rather than be formally amalgamated) with Workgroups on the same day. Panel noted that CMP375 is a complex change and agreed that it is better to commence this as soon as possible and provide clarity for stakeholders on the future of the Expansion Constant and placed this “High” in the prioritisation stack. Given the interaction with CMP315, CMP315 will remain high in the prioritisation stack. Workgroups recommenced on 10 August 2021. Workgroup Report will be presented to July 2022 Panel. Workgroup Consultation issued 14 April 2022 and closed 5pm on 17 May 2022 with 28 non-confidential responses (and 1 confidential response) received. CMP315/CMP375 Workgroup Report was going to be presented to May 2023 CUSC Panel. However, although 2 of the solutions are fully developed, there is one new solution that became a WACM at the Workgroup meeting on 2 May 2023 and this needs further development - timescales (given the requirement for further data from the Transmission Owners). The CMP315/CMP375 Workgroup Report was intended to be issued to the July 2023 CUSC Panel, however a new timeline was approved at the July 2023 CUSC Panel to allow for additional solution refinement. The CMP315/CMP375 Workgroup completed their Workgroup Vote on 16 August 2023, the Workgroup Report was issued to the October 2023 CUSC Panel. The October 2023 CUSC Panel agreed that the Workgroup had met its Terms of Reference and that it could proceed to Code Administrator Consultation. To ensure that industry have sufficient time to consider the Consultation it will be issued on 10 November 2023 until 5pm on 15 December 2023. The Code Administrator Consultation was issued on 10 November 2023 until 5pm on 15 December 2023 and received 17 Non confidential responses and 0 Confidential responses. At the January 2024 CUSC Panel, the Panel recommended unanimously that the CMP375 Original solution, and by majority, that WACM2 better facilitate the CUSC Applicable Objectives. The Final Modification Report was sent to Ofgem on 07 February 2024. CMP375 had an expected decision date of 30 September 2024 as per Ofgem's published update on 2 May 2024. CMP375 had an expected decision date of 30 September 2024 which has now changed to 29 November 2024 as per EDD update from Ofgem on 02 September 2024. CMP375 expected decision date of 07 February 2025 (previously 29 November 2024) as per Ofgem's update at the November 2024 CUSC Panel. (06/03/2025) This modification expected decision date is to be confirmed.
Details
Timeline
Analysis
CMP375 proposes changes to how the Expansion Constant and Expansion Factors are calculated in TNUoS charging, affecting how transmission network investment costs are recovered from users. The modification received unanimous Panel support for the Original solution and majority support for WACM2 in January 2024. Ofgem's decision date has slipped repeatedly from September 2024 to February 2025, with the current expected decision date to be confirmed.
Why it matters
This reform will reshape how transmission investment costs are allocated across users paying TNUoS charges, potentially shifting cost burdens between generators, suppliers and consumers. The repeated delays suggest either technical complexity in assessing distributional impacts or political sensitivity around who ultimately pays for grid expansion to accommodate renewables growth.
Key facts
- •Panel unanimously recommended Original solution and by majority recommended WACM2 in January 2024
- •28 non-confidential responses to workgroup consultation
- •17 non-confidential responses to Code Administrator Consultation
- •Decision date slipped from September 2024 to November 2024 to February 2025