BEIS makes CM supplier payments voluntary but warns of immediate bill on market reinstatement

Energy suppliers will not be subject to mandatory payments to meet Capacity Market levies while the fate of the market is being determined, BEIS has decided. But suppliers will be invoiced and have to pay in full within a few weeks of any ‘triggering event’ that reinstates the market. BEIS will enable suppliers to make “prudent provision in the interim, including through making voluntary payments to the ESC”, to ensure they can pay the full amount of supplier charges promptly when they become due.

Payments will be held in an interest-bearing account until the market’s future is clear (although suppliers can make provision for themselves), and suppliers will be able to request information from on their post-standstill liability.

Responding to a consultation, BEIS also promised to hold the T-1 auction planned for January in summer this year, allowing pre-registered parties to retain their registration but also allowing them to withdraw from the auction.

It also set out a variety of adjustments for companies that have Capacity Market contracts, including extending deadlines for ‘financial commitment milestones’, connection agreements and various testing and metering requirements.

To give effect to these plans draft Regulations (two separate sets are necessary) have been  laid before Parliament and should come into force in late March. They must be debated and agreed by both Houses.

BEIS makes it clear that the decisions do not address all the implications if the EC does not grant State Aid clearance for the Capacity Market, or if the EC requires changes in the Market. At that point it would “take all steps necessary” including further consultation, BEIS said.

 Read the BEIS consultation response in full