Introduction of a Network Charging Compensation (NCC) scheme allowance in the energy price cap decision
Summary
Ofgem decision to introduce a Network Charging Compensation (NCC) scheme allowance in the energy price cap. Operative outcome of the December 2024 consultation.
Why it matters
Operative cap-methodology mechanism that absorbs network-charge volatility between cap-setting windows. Allows suppliers to recover the timing-mismatch between when they pay network charges and when the cap reflects them. Smoothing rather than structural.
Areas affected
Memo
Introduction of a Network Charging Compensation (NCC) scheme allowance in the energy price cap decision | 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: Introduction of a Network Charging Compensation (NCC) scheme allowance in the energy price cap decision Publication type: Decision Publication date: 25 February 2025 Topic: Gas supply, Energy pricing rules Subtopic: Energy price cap Decision for: Introducing a Network Charge Compensation allowance in the energy price cap Print this page Share the page Share on Facebook Share on Twitter Share on LinkedIn Outlines our decision to include an additional allowance for the Network Charging Compensation (NCC) Scheme. We published a statutory consultation on 12 December 2024 setting out proposals to amend the price cap methodology to include an additional allowance for the Network Charging Compensation (NCC) Scheme . The allowance will fund the Energy Intensive Industry (EII) Support Levy. The NCC Scheme is a new government scheme which electricity suppliers are expected to pay into from April 2025. Our decision We have decided to introduce an NCC Scheme allowance in the energy price cap from 1 April 2025. The decision also sets out the associated methodology for calculating the allowance. This will ensure default customers pay no more than the efficient costs incurred by suppliers in funding the NCC scheme. Main document Introducing an additional allowance for the Network Compensation (NCC) Scheme decision [PDF, 342.42KB] Subsidiary documents Policy cost allowance methodology (Annex 4) [XLSX, 448.63KB] Print this page Share the page Share on Facebook Share on Twitter Share on LinkedIn Close