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The Electricity Capacity (Supplier Payment etc.) Regulations 2014

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Capacity market supplier charge: mutualisation

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7.—(1) Paragraphs (2) to (4) apply in relation to a month of a delivery year (“month M”) in respect of which an electricity supplier is in capacity market stage 2 credit default (a “defaulting supplier”).

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

(a)is liable to pay a monthly capacity market supplier charge in respect of month M; and

(b)is not a defaulting supplier,

must make an additional payment (a “mutualisation payment”) to the Settlement Body in month M.

(3) The Settlement Body must, by no later than the first working day of month M—

(a)determine the amount of the mutualisation payment payable by each electricity supplier who is required to make such a payment; and

(b)include that amount in the invoice issued to that electricity supplier under regulation 6(5)(b).

(4) The determination under paragraph (3)(a) must be made in accordance with paragraph 5 of Schedule 1.

(5) Paragraphs (6) and (7) apply where, in relation to a month in respect of which mutualisation payments have been made (“month M”)—

(a)the Settlement Body receives payment from a defaulting supplier of—

(i)all or part of the monthly capacity market supplier charge invoiced to it; or

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

(b)as a result, the total amount of—

(i)monthly capacity market supplier charges,

(ii)late payment interest on such charges, and

(iii)mutualisation payments,

received by the Settlement Body exceeds the total amount of capacity payments payable to capacity providers under regulation 40 of the Principal Regulations.

(6) The Settlement Body must calculate the amount of that excess (the “surplus”) and each electricity supplier who made a mutualisation payment in respect of month M 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.

(7) The Settlement Body must calculate the amount of mutualisation credits to be credited to electricity suppliers under paragraph (6), and credit them with those amounts, as part of the next reconciliation run for month M or for the delivery year which includes month M.

(8) In paragraph (5), “late payment interest” means interest payable by a capacity provider under regulation 46(2) of the Principal Regulations.

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