Increased socialisation of connection costs in the distribution electricity network - Annex 5 – Potential Cost Effects on Example Connections - NI Direct

Annex 5 – Potential Cost Effects on Example Connections

1. The table below sets out some hypothetical, but representative, examples prepared by NIE Networks in response to a costing request by the Department and UR, detailed in the attached document from NIE Networks. They are based on current prices and current network standards.

Table 13. – Examples of potential cost effects of different options on different scenarios

	Total Cost of Works	Unsocialised Network asset Reinforcement Cost	Connection Assets for Customer	Total Cost for Customer
				Option
				1	2	3	4
Large Factory connecting at HV	£460,000	£275,000	£185,000	£460,000	£356,875	£185,000	£185,000
Domestic Rural Connection	£11,917	£7,407.67	£4,509.48	£11,917	£7,176.24	£4,509.48	£4,509.48

1. For the Large Factory connecting at High Voltage, in the worked example, the factory requires 3,500 KVA of electrical capacity. The reinforcements needed to provide that amount of capacity will actually provide 5,600KVA of electrical capacity. Under the partial socialisation option, the factory will pay 3,500/5,600 of the reinforcement costs i.e. £171,875/£275,000, or 62.5% of the reinforcement cost.
2. For the rural connection the increased demand is 18kVA, while the new capacity from reinforcement is 50 kVA, so for a partial socialisation charging option the customer would pay 18/50 of the reinforcement cost of £7,407 which is £2,667 or 36% of the reinforcement cost.