Ofgem has abandoned its plan to charge firms for energy lost in transmission because it would have had no time to secure approval for the idea.
A judge last month threw out Ofgem's attempt to introduce the changes because of a procedural error on the regulator's part. This meant Ofgem would have needed to restart the entire change process again, whereas it had wanted to introduce the changes this April.
A statement from Ofgem says: “After careful consideration of the legal constraints, the Gas and Electricity Markets Authority is of the opinion that it is not legally possible for it to approve this Modification Proposal. This is because the relevant timetable set down in the Final Modification Report made its implementation conditional on a decision being reached by 31 March 2003.”
ScottishPower, Scottish and Southern Energy, AES Drax and Teeside Power had campaigned for a judicial review of Ofgem's plans and, in November, won the right to a hearing (see Electrical Review, November 2003).
Ofgem argued that the charges would have encouraged firms to locate power stations nearer to its customers. The regulator said this would reduce the amount of power lost through transmission and thereby reduce costs and protect the environment.
Power companies, however, said the changes would discriminate against some of the companies located in the far north. They also argued such changes would penalise offshore wind farms.
