The Electricity Capacity (No. 1) Regulations 2019

Mutualisation: modifications

57.—(1) Regulation 7 (mutualisation) of the Supplier Payment Regulations applies as if after paragraph (7), there were inserted—

“(8) Paragraphs (1) to (7) are subject to regulation 7A.”.

(2) The Supplier Payment Regulations apply as if after regulation 7, there were inserted—

“Mutualisation: post-standstill collection

7A.— (1) This regulation applies where a supplier (“S”) is required to pay a capacity market supplier charge to the Settlement Body in respect of a standstill month.

(2) Where this regulation applies, paragraphs (3) to (13) apply in respect of capacity market supplier charge payable in respect of a standstill month of a delivery year (“year X”).

(3) Paragraphs (4) to (6) apply in respect of the standstill collection period of a delivery year (“collection period X”) where an electricity supplier is in post-standstill payment default (a “defaulting supplier”).

(4) Where this paragraph applies, each electricity supplier who—

(a) has been issued an invoice, credit note, or notice in respect of collection period X under regulation 6A(5)(c); and

(b) is not a defaulting supplier,

must make an additional payment (a “mutualisation payment”) to the Settlement Body in respect of collection period X.

(5) The Settlement Body must, by no later than the tenth working day of the post-standstill collection month—

(a) determine the amount of the mutualisation payment payable by each electricity supplier (“S”) who is required to make such a payment in respect of collection period X; and

(b) include that amount in the invoice issued to S in respect of collection period X under regulation 6A(6).

(6) The determination under paragraph (5)(a) must be made in accordance with sub-paragraphs (1) to (3) of paragraph 5A of Schedule 1.

(7) Paragraphs (8) to (10) apply in respect of collection period X where the Settlement Body is required to reduce the amount of capacity payments payable in respect of collection period X because the total amount of capacity payments payable in respect of this period exceeds the total amount of capacity market supplier charges collected in respect of this period.

(8) Where this paragraph applies, each electricity supplier who—

(a) has been issued an invoice, credit note, or notice in respect of collection period X under regulation 6A(5)(c); and

(b) is not a defaulting supplier,

must make a further additional payment (a “supplementary mutualisation payment”) to the Settlement Body in respect of collection period X.

(9) The Settlement Body must, by no later 40 working days after the date on which the Settlement Body was required to make the reduction referred to in paragraph (7) in respect of collection period X—

(a) determine the amount of the supplementary mutualisation payment payable by each electricity supplier (“S”) who is required to make such a payment in respect of collection period X; and

(b) include that amount in the invoice issued to S in respect of collection period X under regulation 6A(11).

(10) The determination under paragraph (9)(a) must be made in accordance with sub-paragraphs (4) to (6) of paragraph 5A of Schedule 1.

(11) Paragraphs (12) and (13) apply where mutualisation payments (including supplementary mutualisation payments where required) have been made in respect of collection period X and—

(a) the Settlement Body receives payment from a defaulting supplier in relation to collection period X of—

(i) all or part of the standstill collection period supplier charge invoiced to it; and

(ii) late payment interest on such a charge; and

(b) as a result of this payment, the total amount of—

(i) standstill collection period supplier charges;

(ii) late payment interest on such charges,

(iii) mutualisation payments (including any supplementary mutualisation payments), and

(iv) late payment interest on such payments,

received by the Settlement Body exceeds the total amount of capacity payments (including residual capacity payments) payable to capacity providers.

(12) The Settlement Body must calculate the amount of that excess (the “surplus”) and each electricity supplier who made a mutualisation payment (including a supplementary mutualisation payment) in respect of collection period X is entitled to be credited with a share of the surplus (a “mutualisation credit”), such that the surplus is distributed between such electricity suppliers in the same proportions as they made mutualisation payments (including supplementary mutualisation payments).

(13) The Settlement Body must calculate the amount of mutualisation credits to be credited to electricity suppliers under paragraph (12), and credit them with those amounts, as part of the next reconciliation run for collection period X or for the delivery year which includes collection period X.

(14) In this regulation “residual capacity payment” means an amount payable to a capacity provider in respect a standstill collection period under—

(a) regulation 40(7)(b) of the Principal Regulations (as modified by Chapter 2 of Part 3 of the Electricity Capacity (No. 1) Regulations 2019); or

(b) regulation 40A(7)(b) of the Principal Regulations (as modified by Part 5 of the Electricity Capacity (No. 1) Regulations 2019).”.