The Principal Regulations apply as if, after regulation 43ZA (termination fees: adjustment for DSR providers) there were inserted—

“DSR unproven capacity fee43ZB.

(1)

A capacity provider (“C”) in respect of a demand side response CMU (“CMU i”) must pay to the Settlement Body a fee (a “DSR unproven capacity fee”), by way of financial penalty, if C has in accordance with capacity market rules provided to the Delivery Body a DSR test certificate which evidences CMU i’s proven DSR capacity is an amount less than CMU i’s de-rated capacity.

(2)

Where a DSR unproven capacity fee would be payable by C before the T-1 capacity agreement trigger event has occurred, this fee only becomes payable if the T-1 capacity agreement trigger event occurs.

(3)

Subject to paragraph (4), the Settlement Body must, as soon as reasonably practicable after receiving notice from the Delivery Body that C has provided a DSR test certificate which gives rise to a DSR unproven capacity fee—

(a)

determine the amount in pounds of the DSR unproven capacity fee that is payable (or which would be payable if the T-1 capacity agreement trigger event occurred); and

(b)

issue to the capacity provider an invoice for that amount.

(4)

An invoice under paragraph (3)(b) must only be issued on or after the date on which the T-1 capacity agreement trigger event occurred.

(5)

The DSR unproven capacity fee payable by C in respect of CMU i is—

(a)

where CMU i’s proven DSR capacity is less than 90% of CMU i’s de-rated capacity, UCF 1; and

(b)

where CMU i’s proven DSR capacity is equal to or greater than 90% of CMU i’s de-rated capacity, UCF 2.

(6)

In this regulation—

“UCF 1” means an amount equal to £5000 per MW of the amount of the de-rated capacity of CMU i; and

“UCF 2” means an amount calculated in accordance with the formula—

$$UCF2=UCF1\times \left(\left(DC-PC\right)/DC\right)$$

(7)

In paragraph (6)—

“DC” means CMU i’s de-rated capacity; and

“PC” means CMU i’s proven DSR capacity.”.