Commentary on Sections Chapter 4: Further Provisions about Regulation Section 184: Assistance for areas with high distribution costs
454.This section gives the Secretary of State the power to make an order to establish a scheme requiring authorised transmitters (in practice the Great Britain System Operator) to make a payment to a distributor when that distributor faces costs that are significantly higher than in other areas of Britain. The power will be exercisable in respect of a single area to be specified in the order. In order to qualify for a payment, the distributor must be one which distributes electricity by means of a distribution network when at least 100,000 premises are connected to that same network. The payment must be passed from the distributor to suppliers within the relevant area. The scheme will be funded by charges on suppliers across Britain.
455.The Secretary of State must consult before establishing a scheme, and must carry out a review of the scheme every three years.
456.This section is intended to replace a licence condition formerly imposed on SSE Generation Limited known as “Hydrobenefit” which was removed in January 2004. It is intended that this section will benefit customers in the north of Scotland, where there are the highest distribution costs in Britain by a significant margin.