The Electricity (Competitive Tenders for Offshore Transmission Licences) Regulations 2015

Calculation of costs incurred in connection with transmission assets

4.—(1) In respect of a generator build tender exercise, the Authority must calculate, based on all relevant information available to the Authority at that time, other than further information that the Authority required under paragraph (3) and decided not to take into account in accordance with paragraph (7), the economic and efficient costs which ought to be, or ought to have been, incurred in connection with developing and constructing the transmission assets in respect of a qualifying project in accordance with paragraph (2).

(2) The calculation of costs in paragraph (1) is to be–

(a) where the construction of the transmission assets has not reached the stage when those transmission assets are available for use for the transmission of electricity, an estimate of the costs which ought to be incurred in connection with the development and construction of those transmission assets; or

(b) where the construction of the transmission assets has reached the stage when those transmission assets are available for use for the transmission of electricity, an assessment of the costs which ought to have been incurred in connection with the development and construction of those transmission assets.

(3) The Authority may require the developer to provide further information for the purpose of the calculation of costs in paragraph (1).

(4) Where the Authority requires the developer to provide further information in accordance with paragraph (3), the Authority must specify the date by which the developer must provide that information.

(5) Where the Authority considers that the information provided by the developer in accordance with paragraph (3) is a material change from the information already available to the Authority, it may, in order to provide bidders, qualifying bidders, the preferred bidder, reserve bidder or successful bidder with the most accurate estimate of the costs to which the information relates, undertake one or more further estimates of those costs, as it considers necessary, until such time as the transmission assets are available for use for the transmission of electricity.

(6) Where the Authority–

(a) has previously estimated the costs in accordance with paragraph (2)(a) or (5); and

(b) is satisfied with the evidence provided by the developer that those transmission assets are available for use for the transmission of electricity,

the Authority must, as soon as reasonably practicable, assess the economic and efficient costs which ought to have been incurred in connection with the development and construction of those transmission assets.

(7) The Authority may decide not to take into account any information that is provided after the date specified by the Authority in accordance with paragraph (4) in undertaking an estimate or an assessment in accordance with this regulation.

(8) Where the Authority has determined to grant an offshore transmission licence to the successful bidder in respect of a particular qualifying project in accordance with regulation 28(2), the assessment undertaken in accordance with paragraph (2)(b) or (6) must be used by the Authority to determine the value of the transmission assets to be transferred to the successful bidder.