“1. Charges applied by network operators for access to networks shall be transparent, take into account the need for network security and reflect actual costs incurred insofar as they correspond to those of an efficient and structurally comparable network operator and are applied in a non-discriminatory manner. Those charges shall not be distance-related.”
“2. Guidelines may also determine appropriate rules leading to a progressive harmonisation of the underlying principles for the setting of charges applied to producers and consumers (load) under national tariff systems, including the reflection of inter-transmission system operator compensation mechanism in national network charges and the provision of appropriate and efficient locational signals, in accordance with the principles set out in Article 14.”
“Charges applied by network operators for access to the transmission system shall be in accordance with guidelines set out in Part B of the Annex.”
“1. Annual average transmission charges paid by the producers in each Member State shall be within the ranges set out in point 3. 2. Annual average transmission charges paid by producers is annual total transmission tariff charges paid by producers divided by the total measured energy injected annually by producers to the transmission system of a Member State. For the calculation set out at Point 3, transmission charges shall exclude: (1) charges paid by producers for physical assets required for connection to the system or the upgrade of the connection; (2) charges paid by producers related to ancillary services; (3) specific system loss charges paid by producers. 3. The value of the annual average transmission charges paid by producers shall be within a range of 0 to 0.5 EUR/MWh except those applying in Denmark, Sweden, Finland, Romania Ireland, Great Britain and Northern Ireland. … Annual average transmission charges paid by producers in … Great Britain and Northern Ireland shall be within a range of 0 to 2.5 EUR/MWh …”
“local charges” (intended to reflect matters such as the cost of assets needed to connect the generators equipment – for example a power station – to the transmission network); and “wider locational charges” (intended to recover the cost imposed on the transmission network as result of the connection to the network of the individual generator). Together these are referred to as “locational charges”
“Terms: Embedded Benefits 45. The Proposal(s) must set out proposals to modify the Use of System Charging Methodology, Section 14 CUSC to set the TGR to£0 , subject to ensuring ongoing compliance with EU Regulation No 838/2010 (in particular, the requirement that average transmission charges paid by producers in each Member State must be within prescribed ranges – which for Ireland, Great Britain and Northern Ireland is 0 to 2.50 EUR/MWh). This should be achieved by charging generators all applicable charges (having factored in the correct interpretation of the connection exclusion as set out in EU Regulation 838/2010) and adjusted if needed to ensure compliance with the 0 to 2.50 EUR/MWh range. 46. NGESO must work in conjunction with the relevant industry work group(s) in place for CMP 317 (and provide such input as appropriate) to seek to ensure that any impact on that modification proposal by the TCR Decision is addressed in a manner that does not undermine NGESO’s ability to comply with its obligations under this Direction. In doing so, the Proposal(s) must set out proposals for an appropriate adjustment charge to ensure compliance with the EU Regulation 838/2010, if NGESO considers it necessary (see paragraphs 4.76 to 4.78 of the TCR Decision). 47. The Proposal(s) must set out proposals to modify the Use of System Charging Methodology, Section 14 of CUSC regarding the basis on which suppliers balancing services charges are applied. In particular, such charges are to be applied using gross demand measured at the Grid Supply Point, having the effect of removing the Embedded Benefit that balances the offsetting of Suppliers’ net demand and in turn, a reduction of liability for balancing services charges. This will remove payments from suppliers to smaller distributed generators for this service. 48.
“Connection Charges and charges in respect of an On-shore local circuit, On-shore local substation, Off-shore local circuit and Off-shore local substation.”
“(4) The CMA may allow the appeal only if it is satisfied that the decision appealed against was wrong on one or more of the following grounds— (a) that GEMA failed properly to have regard to the matters mentioned in subsection (2); (b) that GEMA failed properly to have regard to — (i) the purposes for which the relevant condition has effect (in the case of an appeal by virtue of section 173(2)), or (ii) the purposes of the power to give a direction undersection 36 of the Gas Act 1986 or the purposes of Standard Special Condition A11 of licences granted under section 7 of that Act (in the case of an appeal by virtue of section 173(2A)); (c) that GEMA failed to give the appropriate weight to one or more of those matters or purposes; (d) that the decision was based, wholly or partly, on an error of fact; (e) that the decision was wrong in law. (5) Where the CMA does not allow the appeal, it must confirm the decision appealed against. (6) Where it allows the appeal, it must do one or more of the following— (a) quash the decision appealed against; (b) remit the matter to GEMA for reconsideration and determination in accordance with the directions given by the CMA; (c) where it quashes the refusal of a consent, give directions to GEMA, and to such other persons as it considers appropriate, for securing that the relevant condition has effect as if the consent had been given.” (a) that GEMA failed properly to have regard to the matters mentioned in subsection (2); (b) that GEMA failed properly to have regard to — (i) the purposes for which the relevant condition has effect (in the case of an appeal by virtue of section 173(2)), or (ii) the purposes of the power to give a direction undersection 36 of the Gas Act 1986 or the purposes of Standard Special Condition A11 of licences granted under section 7 of that Act (in the case of an appeal by virtue of section 173(2A)); (c) that GEMA failed to give the appropriate weight to one or more of those matters or purposes; (d) that the decision was based, wholly or partly, on an error of fact; (e) that the decision was wrong in law. (a) quash the decision appealed against; (b) remit the matter to GEMA for reconsideration and determination in accordance with the directions given by the CMA; (c) where it quashes the refusal of a consent, give directions to GEMA, and to such other persons as it considers appropriate, for securing that the relevant condition has effect as if the consent had been given.”
“(a) that compliance with the use of system charging methodology facilitates effective competition in the generation and supply of electricity and (so far as consistent therewith) facilitates competition in the sale, distribution and purchase of electricity; (b) that compliance with the use of system charging methodology results in charges which reflect, as far as is reasonably practicable, the costs (excluding any payments between transmission licensees which are made under and in accordance with the STC) incurred by transmission licensees in their transmission businesses and which are compatible with standard condition C26 (Requirements of a connect and manage connection); (c) that, so far as is consistent with sub-paragraphs (a) and (b), the use of system charging methodology, as far as is reasonably practicable, properly takes account of the developments in transmission licensees’ transmission businesses; (d) compliance with the Electricity Regulation and any relevant legally binding decisions of the European Commission and/or the Agency; and (e) promoting efficiency in the implementation and administration of the system charging methodology.”
“5.34 We do not agree with GEMA that the obligations imposed by [Regulation 838/2010] should be viewed exclusively as an obligation of result. The correctness of that result depends upon whether the necessary calculation is performed in accordance with the mandatory requirements that are also included in [Regulation 838/2010] in this regard. 5.35 That said, we do accept GEMA’s submission that the purpose of the calculation prescribed in Part B is to enable the assessment of whether or not the average annual charges fall within the relevant Permitted Range. It is the obligation to comply with the Permitted Range which is the primary or principal obligation imposed by [Regulation 838/2010]. [Regulation 838/2010] does not introduce freestanding obligations on Member States or now the UK to incorporate the definitions directly into the domestic charging arrangements and/or otherwise prescribe how those arrangements should be formulated and applied. The definitions in Part B, including the definition of the Connection Exclusion, are instead the constituent elements for assessing whether the primary obligation is met … 5.36 Applying the reasoning of [decision on CMP 261] … the fact that the domestic arrangements do not mirror precisely the calculations required for assessing compliance is not therefore in itself a breach of [Regulation 838/2010]. It is possible that a relevant regulator within an EU Member State could assess, separately, whether compliance has been achieved with the Permitted Ranges, applying the correct construction of the required exclusions. EU Member States, and now the UK, have flexibility in designing and structuring their domestic arrangements so long as the Permitted Ranges are not breached (correctly calculated). … 7.9 We do not accept [SSEGL’s] core argument that any error in the CUSC Calculation amounts to a legal error rendering the Decision unlawful come what may. We have explained the reasons for this conclusion [above] … In summary: (a) [Regulation 838/2010] is not a full harmonisation measure. Much flexibility is left to each Member State, and GB, now the UK has left the EU, to determine its own domestic charging arrangements. The primary, relevant, obligation imposed by [Regulation 838/2010] is that annual average transmission charges must fall with the Permitted Range. It does not follow that any error in the domestic calculation necessarily means there has been a breach of EU law. (b) Applying this conclusion to the domestic CUSC arrangements, it does not automatically follow that any departure from the correct definitions in the CUSC Calculation will result in a breach of [Regulation 838/2010]. As set out…above…we reject [SSEGL’s] appeal against GEMA’s own construction of the Connection Exclusion. On this basis, the impact of relying on the incorrect construction of the Connection Exclusion by implementing the Original Proposal is marginal…We do not therefore consider that the admitted error in the implementation of the Connection Exclusion through the Original Proposal renders the Decision automatically unlawful.”
“Connection Charges and charges in respect of an Onshore local circuit, Onshore local substation, Offshore local circuit, Offshore local substation”
“Connection Charges and charges in respect of an Onshore local circuit, Onshore local substation, Offshore local circuit and Offshore local substation except for those charges that arefor Shared Assets or Pre-Existing Assets.”
“We set out our analysis of the correct interpretation of the Connection Exclusion in Legal Annex Two. In summary we consider that the Connection Exclusion includes all charges paid by generators in respect of Local Assets whether shared/sharable or otherwise) that were required to connect the generator(s) in question to the NETS as the NETS existed at the time the generator(s) wished to connect. We consider that charges paid by generators in relation to Local Assets which existed at the point at which such generator(s) wished to connect to the NETS do not fall within the Connection Exclusion. By way of an illustrative example, suppose that two generators connect to the transmission system in a similar area at different times. For the first generator (“Generator One”) to connect, a Local Circuit and Local Substation are installed. Generator One pays Local Circuit and Local Substation [Transmission Network Use of System] Charges in respect of these “Local Assets” based on its Transmission Entry Capacity. As the Local Assets were required to connect Generator One to the NETS as the NETS existed at the time the Generator One wished to connect, those charges fall within the Connection Exclusion. A second generator (“Generator Two”) subsequently wishes to connect at a location close to Generator One. It may utilise Local Assets used by Generator One which now form part of the NETS, instead of requiring a new Local Substation and/or Local Circuit. As such, the Local Assets in this example were required for Generator One to connect to the NETS, but not for Generator Two to connect to the NETS (since the Local Assets already existed at the time Generator Two wished to connect). Local Charges will be payable by both generators based on their respective Transmission Entry Capacities. Local Charges paid by Generator One will fall within the Exclusion (both before and after the connection of Generator Two), but the Local Charges paid by Generator Two will not (since the Local Charges paid by Generator Two do not relate to assets required to connect Generator Two to the NETS as it existed at the time Generator Two wished to connect). For the avoidance of doubt, if Generator One and Generator Two had both wanted to connect to the NETS at the same time and Local Assets were installed for them to share a connection from the outset, the Local Charges paid by both Generator One and Generator Two in respect of those Local Assets would fall within Connection Exclusion.”
“Ancillary service means a service necessary for the operation of a transmission or distribution system, including balancing and non-frequency ancillary services, but not includingcongestion management.”
“Congestion means a situation in which all requests from market participants to trade between network areas cannot be accommodated because they would significantly affect the physical flows on network elements which cannot accommodate those flows.”
“The balance of the system can be affected by disparities between the amount of electricity that a generator has agreed to inject into the grid, and the amount that it in fact injects. Similarly, a supplier’s customers may import more or less electricity than the suppler had contracted to import. To mitigate against such disparities, the GB market includes a financial settlement process, administered by Elexon in accordance with the [Balancing and Settlement Code], which encourages market participants to be “balance responsible”
“13. Our view is that the transmission system could not reliably be kept in balance without a process to check how much electricity generators and suppliers have injected onto or withdrawn from the system, and to financially incentivise them to minimise variation from the volume that they had forecast. We therefore consider that the provision of a settlement process of the sort administered by Elexon, the costs of which are recovered via [Balance and Settlement Code] Charges, to be related to “a service necessary for the operation of a transmission … system”
“8.43 … In our view, the services to which the [Balancing and Settlement Code] charges relate would clearly fall within the scope of ancillary service, as GEMA concluded. They relate to a (financial) settlement system without which the transmission system could not be kept in balance. However, the settlement system is not part of the transmission system itself (i.e., the main service). As [SSEGL] have… postulated “The main service here is the operation of the transmission system. Ancillary services are typically understood to cover provision of services that are necessary for the operation of the system but are not the operation of the system itself.” 8.44 Nonetheless, the settlement system is a critical element in the operation of the transmission system because it is the means by which it is kept in balance. It is therefore “necessary” within the definition of an ancillary service, but it is not (on [SSEGL’s] construct) the operation of the system itself.” “The main service here is the operation of the transmission system. Ancillary services are typically understood to cover provision of services that are necessary for the operation of the system but are not the operation of the system itself.”
“8.54 Although ‘congestion management’ is not defined, it cannot sensibly be interpreted as being anything other than the management of ‘congestion’ within the terms of that definition in Article 2(4). A relevant service will therefore be one which is directed to managing congestion arising from a situation involving trade between ‘network areas’”. 8.55 As GEMA pointed out, the reference to network areas reflects changes in the European electricity market between 2009 and 2019 during which some network areas comprised more than one Member State and could exchange electricity without the need for capacity allocation. 8.56 It thus seems to us that the definition of congestion is an updating of essentially the same concept as contained within the definition of congestion in Article 2(2)(c) of the [2009 Regulation]; ‘congestion’ means a situation in which an interconnection linking national transmission networks cannot accommodate all physical flows resulting from international trade requested by market participants, because of a lack of capacity of the interconnectors and/or the national transmission systems concerned. 8.57 The words ‘because of’ are important. The definition draws a distinction between cause (i.e., lack of capacity of interconnectors and/or the national transmission systems) and effect (i.e., the inability of the interconnector to accommodate all physical flows). It is the effect which constitutes “congestion” not the cause. Therefore, even applying the definition in [the 2019 Regulation], congestion is limited to congestion on interconnectors … 8.59 We also note that the definition of ancillary services in the [2019 Electricity Directive] and the [2019 Regulation] distinguishes between (i) services for congestion management (charges for which are expressly excluded from the [ancillary service exclusion]); and (ii) balancing and non-frequency allocation services (charges for which are expressly included). The latter, which are defined via the [2019 Electricity Directive] and the [2019 Regulation], relate to the management of internal constraints within a network area. Such internal constraints and those relating to cross-border congestion are managed differently in practice: internal constraints by way of separate services and charges (in GB, by the balancing services [National Grid] provides and the settlement services administered by Elexon) and cross-border congestion by the capacity allocation process described in paragraph 8.23 above. … 8.61 We therefore consider that the concept of congestion, and hence congestion management and related charges, is, in the definition of ancillary services, concerned with the issue of capacity allocation across interconnectors, not with congestion management internal to a single network area. We also agree that this is made clear by the definition of ancillary services in the [2019 Electricity Directive] and the [2019 Regulation] (in specifying that balancing and non-frequency services are within the definition, but not congestion management). 8.62 On this basis we do not consider that the relevant [Balancing Services Use of System] charges relate to congestion management. They therefore fall within the scope of [ancillary service exclusion], as GEMA concluded.”
“120 … We are concerned that a culture has developed in the context of judicial review proceedings for there to be excessive prolixity and complexity in what are supposed to be concise grounds for judicial review. As often as not, excessively long documents serve to conceal rather than illuminate the essence of the case being advanced. They make the task of the court more difficult rather than easier and they are wasteful of costs. It is for these reasons that skeleton arguments are subject to length constraints and so too, for example the length of printed cases in the Supreme Court.”
“A skeleton argument must be concise. It should both define and confine the areas of controversy; be set out in numbered paragraphs; be cross-referenced to any relevant document in the bundle; be self-contained and not incorporate by reference material from previous skeleton arguments or pleadings; and should not include extensive quotations from documents or authorities. Documents to be relied on must be identified.”