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This document sets out the Government’s response to feedback received from the consultation on the proposed 2015/16 operational costs and resulting levies for the Low Carbon Contracts Company and the Electricity Settlements Company. It sets out the key issues raised by organisations responding to the consultation and Government’s response on these points.
This consultation seeks views on the proposed 2015/16 operational cost budgets and levies for the Low Carbon Contracts Company and the Electricity Settlements Company. These two Government-owned companies, which became operational on 1 August 2014, manage key mechanisms for implementing Government’s Electricity Market Reform. The Low Carbon Contract Company manages and makes payments under Contracts for Difference to incentivise investment in low carbon technologies. The Electricity Settlements Company is responsible for payment flows under the Capacity Market, including making capacity payments to capacity providers, controlling collateral and managing auction bid bonds.
The operational costs of the companies are recovered through levies on electricity suppliers, as set out in legislation. Following the outcome of the consultation, the operational cost levy rates for 2015/16 will be reflected in secondary legislation, which is intended to be laid in Parliament in early 2015, to come into force (subject to the will of Parliament) by 1 April 2015.
The consultation closes on 3 December 2014.