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In November 2017, we issued a consultation document on the proposed 2018-2019 to 2020-2021 operational costs for the Low Carbon Contracts Company (LCCC) and Electricity Settlements Company (ESC). The Government Response summarises the comments received from consultation respondents and addresses points raised. It confirms that respondents were generally supportive of the proposed operational cost budgets for both companies for the next three financial years and that those budgets will remain unchanged.
The operational costs of LCCC and ESC are funded through a levy on electricity suppliers. Secondary legislation to revise the companies’ operational cost levies for 2018-2019 to 2020-2021 (The Electricity Supplier Payments (Amendment) Regulations 2018) has now been laid before Parliament. The intention is that, subject to the will of Parliament, the 2018-2019 levies will come into effect from 1 April 2018, and the 2019-2020 and 2020-2021 levies will come into effect from 1 April 2019 and 2020 respectively.
We’re seeking views on the proposed 2018-2019, 2019-2020 and 2020-2021 operational cost budgets and resulting levies for the Low Carbon Contracts Company (LCCC) and the Electricity Settlements Company (ESC). We would also like your views on a proposal to amend legislation so that the levies can be set more than one financial year in advance.
The Low Carbon Contracts Company enters into and manages Contracts for Difference (CfD) with low carbon electricity generators. The Electricity Settlements Company is responsible for financial transactions relating to 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. Subject to the outcome of the consultation, the regulations will be amended, and the operational cost levies for 2018-2019, 2019-2020 and 2020-2021 will be reflected in secondary legislation, which is intended to be laid in Parliament in early 2018, to come into force (subject to the will of Parliament) before 1 April 2018.