Draft Electricity Supplier Payments (Amendment) Regulations 2016

Stephen Phillips Excerpts

Tuesday 1st March 2016 General Committees

[Andrea Leadsom]

I will certainly write to the hon. Gentleman on that point.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

I note that regulation 16 amends regulation 23 of the Contracts for Difference (Electricity Supplier Obligations) Regulations 2014 by increasing the operational costs levy from 0.0397p to 0.0509p. That is a significant increase, and if the Minister is going to write to the Committee, I would like her to explain what that increase relates to, as it is a levy in relation to the operational costs of the CfD counterparty, and what she will do to bear down on that increase and make sure it does not go any further.

[Andrea Leadsom]

I do not think it is necessary to write to hon. Members, but I am happy to do so if my hon. and learned Friend would like me to. As I have explained, the purpose of the Low Carbon Contracts Company is to be the counterparty to contracts for difference. As those CfDs have begun to be allocated, the contractual work that the company is undertaking has escalated significantly. The operating costs have been reviewed closely by DECC and by the companies, and through parliamentary scrutiny, so further significant increases are not expected. However, as my hon. and learned Friend would expect, with the establishment of contracts and the potential for new contracts coming on board all the time, there has been an adjustment. I am happy to write to the Committee if my hon. and learned Friend would like me to—[Interruption.] He would like me to do so, so I certainly will.

As I am sure Members are aware, a key objective of the Government’s energy policy is to keep costs as low as possible as we transition to a low carbon economy. The changes we are seeking to make forward that objective by implementing a series of technical and administrative amendments that ensure the CfD scheme and the capacity market continue to operate with best value for money for consumers. I commend the order to the Committee.

Question put and agreed to.