PART 2Discounted supply price

CHAPTER 1Determination of prices

Reference wholesale price – fixed price, variable price and DAI price contracts9.

(1)

The Secretary of State must establish and publish a methodology for determining reference wholesale prices applicable to fixed price contracts, variable price contracts and DAI price contracts.

(2)

The methodology may—

(a)

make different provision in respect of fixed price contracts, variable price contracts and DAI price contracts;

(b)

in relation to a fixed price contract, make reference to the price-fix date of that contract;

(c)

provide, in relation to any category of supply contract, for a reference wholesale price to be determined for the whole of a scheme period or for different reference wholesale prices to be determined for different periods within a scheme period;

(d)

refer to published quotations of wholesale prices for electricity or gas traded in the wholesale markets at different times and for delivery at different times.

(3)

The methodology must not refer to—

(a)

any particular details of a variable price contract or a DAI price contract;

(b)

any particular details of a fixed price contract other than the price-fix date.

(4)

Where the methodology provides, in relation to a category of supply contract, for more than one reference wholesale price to be determined—

(a)

subject to paragraph (b), the methodology must provide for how it is to be determined which of those reference wholesale prices applies to any particular supply contract in that category;

(b)

in relation to a DAI price contract, the methodology may provide for different reference wholesale prices to apply in different periods.

(5)

The Secretary of State must determine in accordance with the methodology, and publish at times decided by the Secretary of State, the reference wholesale prices for variable price contracts, fixed price contracts and DAI price contracts.

(6)

The Secretary of State may amend the methodology by publishing the amendment.

(7)

Where, in accordance with the methodology or any amendment of it, the Secretary of State revises any wholesale reference price which has already been determined in respect of variable price contracts—

(a)

the Secretary of State must publish the date on which the revision takes effect (“effective date”) which must not be earlier than the date on which the revised price was published;

(b)

the revised wholesale reference price—

(i)

applies in respect of variable price contracts entered into on or after the effective date;

(ii)

where so determined by the Secretary of State, applies in respect of energy supplied on and after the effective date under variable price contracts entered into before that date.