Connection charge contributions recoverable for business premises

Whilst each electricity distributor in England and Wales is obliged to make connections to its distribution network in accordance with the procedure set out in Sections 16 to 23 of the Electricity Act 1989, the party being connected must pay the costs of connection, and, if necessary, for network modification. These costs (which tend to be particularly high in remote areas) can in some cases present a prohibitive barrier to the development of renewable and other electricity sources.

This barrier may be lessened by the forthcoming extension of the scope of the Electricity (Connection Charges) Regulations 2002. At present the regulations enable the first 'connectee' to recover a contribution towards the costs it has incurred for connection to a distribution system from subsequent connectees who use the electric lines and electrical plant provided to make the initial connection. The regulations, however, only apply to 'domestic' connections.

From 1 June 2003 onwards, the date on which the Electricity (Connection Charges) (Amendment) Regulations 2002 take effect, the regulations will apply in respect of connections not only of domestic premises but also of non-domestic premises. This should enable a business considering, for example, installation of a wind farm or other distributed generation in a remote location to anticipate defraying some of its connection costs as first comer by recovering a contribution from subsequent arrivals to the location, and avoid having them take advantage of network modifications for which it has paid.

For further information please contact Robert Lane at [email protected] or on +44 (0)20 7367 2021.