S.I. 2003/847: memorandum
from the Department of Trade and Industry
Gas (Applications for Licences and Extensions
and Restrictions of Licences) (Amendment) Regulations 2003 (S.I. 2003/847)
1. The Joint Committee on Statutory instruments has
asked DTI / Ofgem to explain the reasons for the substantial increase
in fee No. 4 in new Schedule 4 (application for extension of licence
so as to include authorisation to supply gas to domestic premises
to which gas is conveyed by a gas transporter) from £600
to £1000, and why no indication is given in the explanatory
note of the amount of the increase: see paragraph 2.77 of Statutory
2. The new Schedule 4, No.4 contains a 67 percent
increase in fees compared with the old Schedule 4.
3. The increase in fees reflects the substantial
increase in costs to Ofgem of assessing codes of practice submitted
with an application for an extension of a licence so as to include
authorisation to supply electricity to domestic premises.
4. This increase in costs is a result of changed
Ofgem working practices required following the publication by
Ofgem of objective and non-discriminatory criteria.
The costs represent administrator time required to assess the
codes of practice submitted which demonstrate an applicants' ability
to protect domestic customers.
5. In seven out of the eight application fees the
amendment Regulations have led to reductions, which in some cases
have been significant and in the order of 50% or more.
6. Ofgem has taken great care to ensure that the
fees contained within the Application Regulations fully reflect
the costs of processing applications.
7. Ofgem regrets not having explained the reasons
for the increase in fee No.4 more clearly in the recently published
1 The Gas (Applications for Licences and Extensions
and Restrictions of Licences) Regulations 2001 SI 3353 Back
Gas and electricity codes of practice. Guidance for domestic suppliers.
October 2001/61/01 Back