The Electricity Capacity (Supplier Payment etc.) Regulations 2014

Settlement costs levy

9.—(1) An electricity supplier (“S”) must pay a settlement costs levy to the Settlement Body in respect of a relevant financial year (“year Y”), if S supplies electricity to premises in Great Britain in periods of high demand in year Y.

(2) The total amount to be charged to all electricity suppliers in respect of the settlement costs levy for year Y is £1,374,000.

(3) An electricity supplier who supplied electricity to premises in Great Britain in periods of high demand in the financial year preceding year Y must make a monthly payment to the Settlement Body (a “monthly settlement costs levy payment”) in each month of year Y (“month M”) on account of its liability under paragraph (1).

(4) The Settlement Body must—

(a) before the start of year Y—

(i) calculate for each electricity supplier in accordance with paragraph 7 of Schedule 1 the amount of the monthly settlement costs levy payment to be paid by that electricity supplier in each month of year Y;

(ii) give notice to each electricity supplier of the amount calculated under paragraph (i) for that supplier for each month of year Y; and

(b) by no later than the first working day of month M, issue to each electricity supplier an invoice for the amount determined for it under sub-paragraph (a)(i) for month M.

(5) The Settlement Body must, as soon as reasonably practicable after 16th March in year Y, calculate—

(a) in accordance with paragraph 8 of Schedule 1, the amount of the revised settlement costs levy payment payable by each electricity supplier in respect of month M; and

(b) for each electricity supplier (“S”), the difference between—

(i) the sum of S’s revised monthly settlement costs levy payments for each month of year Y (“TRML”); and

(ii) the sum of the amounts paid by S pursuant to invoices issued under paragraph (4)(b) for each month of year Y (“TPML”).

(6) The Settlement Body must—

(a) if TRML is greater than TPML, issue to S an invoice for the amount of the difference between TRML and TPML;

(b) if TRML is less than TPML, subject to paragraphs (7) and (8), issue to S a credit note for the amount of the difference between TRML and TPML; and

(c) if TRML is equal to TPML, give S a notice that no further payment is due to or from S in respect of settlement costs levy.

(7) Paragraph (8) applies where, by the end of the payment due date for invoices issued under paragraph (6)(a), the total amount received by the Settlement Body from payers in respect of such invoices (“TAR”) is less than the total of the amounts determined under paragraph (6)(b) for all electricity suppliers to whom paragraph (6)(b) applies (“TAP”).

(8) Where this paragraph applies, the Settlement Body must—

(a) recalculate the amount due to each creditor under paragraph (6)(b), by reducing each credit payable by the same proportion that TAP bears to TAR; and

(b) issue to each creditor a credit note for the amount recalculated under sub-paragraph (a).

(9) A credit note under paragraph (6)(b) or (8)(b) must be issued as soon as reasonably practicable after the calculation or recalculation has been made under paragraph (5)(b) or (8)(a).