Hydro Benefit Replacement Scheme and Common Tariff Obligation: statutory review 2019
Download the full outcome
Detail of outcome
Following consideration of responses to the consultation, the government has decided that the Hydro Benefit Replacement Scheme and the Common Tariff Obligation will be retained, as they perform a useful function in helping to protect consumers from the inevitably higher costs of electricity distribution in the North of Scotland.
Secondary legislation has been laid before Parliament to deliver Great Britain-wide funding for the Shetland cross-subsidy through the Hydro Benefit Replacement Scheme. This will have the effect of reducing costs for all electricity consumers in the North of Scotland by a total of £27 million annually from April 2021 onwards.
Detail of feedback received
The consultation received 26 responses from a range of interested parties, including:
- the energy industry
- local authorities
- consumer representatives
- individuals
Most respondents had a direct interest in electricity costs for the North of Scotland.
All respondents supported some form of action to protect electricity distribution consumers in the North of Scotland, and the majority agreed that the Hydro Benefit Replacement Scheme and Common Tariff Obligation should continue. All those respondents who expressed a view agreed with the government’s proposal to revise funding arrangements for the Shetland cross-subsidy so that it is delivered through the Hydro Benefit Replacement Scheme.
Original consultation
Consultation description
The government must review the Hydro Benefit Replacement Scheme and the Common Tariff Obligation every 3 years. These schemes help protect consumers in the North of Scotland from the high costs of electricity distribution in that area.
This consultation forms part of the review process, and we invite views from any interested parties on whether the schemes continue to meet their policy objectives and are operationally effective.
Views are also invited on a proposed mechanism to deliver a revised funding arrangement for the Shetland cross-subsidy from April 2020 onwards, which will have the effect of reducing electricity distribution costs for all consumers in the North of Scotland.
Documents
Last updated 13 February 2020 + show all updates
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Government response published.
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First published.