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Assessment & Design (A&D) costs are incurred by electricity distribution network operators (DNOs) when they prepare connection offers. Currently connection applications are free to all customers and only those who accept the connection offer have to pay the DNO costs of providing all offers. It has been argued that the absence of upfront A&D fees has encouraged multiple and repeat speculative connection applications. These applications increase costs and divert significant DNO resources to providing offers that will never connect. It has also been argued that upfront fees would be a fairer way of recovering A&D costs. Others have suggested that the introduction of upfront A&D fees would not reduce speculative applications as other factors, such as a lack of information on network capacity, drive customer behaviour. There have also been concerns about how any upfront A&D fees would be applied, particularly the impact on smaller customers and community projects.
DECC understands the potential benefits of enabling A&D fees to be levied upfront, but also recognises that concerns have been raised too. We are therefore seeking views from stakeholders on the case for introducing upfront fees and, if introduced, how they might best be implemented.