We have published Guidelines: Variable charges under the Low Fixed Charge Regulations (Regulations). The guidelines set out our interpretation of ’variable charges’ and our view on the Regulations’ requirements for variable charges that are based on a consumer’s electricity demand (demand charges) or capacity (capacity charges).

We intend the guidelines to provide clarity and assist distributors and retailers to comply with the Regulations if they adopt demand or capacity charges. This will assist distributors to introduce more efficient distribution charges, which would promote efficiency in the electricity industry for the long-term benefit of consumers. We have published the guidelines in response to requests for more clarity around the requirements of the Regulations from participants in submissions on our November 2015 consultation paper on the implications of evolving technologies for distribution pricing.