This page provides full details of the proposed change, relevant dates and decisions.

What is the issue?

The policy intent for Rule 3.3.5 is that each single CMU or multiple CMUs who all belong to the same Group (a holding company and its subsidiaries) is represented either by the Applicant themselves or by a nominated Agent who acts as Applicant, Bidder and/or Capacity Provider for only that CMU or the CMUs of that Group.

This rule is in place to ensure that those with the ability to bid in the CM auctions are acting independently so that the market remains competitive.

It is currently possible and within the rules for one Group to act as an Agent for multiple CMUs from different Groups by forming subsidiaries, such as a special purpose vehicle (SPV). However, this clearly contradicts the policy intent behind Rule 3.3.5.

What is the proposed solution?

Amending Rule 3.3.5 to clarify that an Agent cannot also be a member of a Group (the direct or indirect Holding Company and any Subsidiary of that Holding Company) that includes a member acting as an Agent representing other Applicants.

Status
Title Decoration

Diagram of CMAG Rule Change Proposal stages: Submission, Scheduled, CMAG development, Consultation, With Ofgem, Implemented.CMAG development phase

This is the stage after the CMAG has initially considered the CM Rule Change Proposal and has determined that further assessment is required of the proposal. Activities in this stage may include the development  of possible solution options, the development of legal text for a proposal and/or the consideration of the impacts of a solution on relevant stakeholders.

Proposer: Ofgem Type of change: Amendment Date Raised: 05 December 2023

Next Steps
Title Decoration

Milestone Date
Proposal Form Submission 22 November 2023
CMAG Initial Consideration Meeting 15 (13 December 2023)
CMAG Development Meeting 16 (16 January 2024)
CMAG Recommendation to Ofgem TBC
Ofgem Statutory Consultation TBC
Implementation TBC

 

Impacts and Related Changes
Title Decoration

Impacts

Capacity Market Rules Sections

  • Rule 3.3.5 – Submitting an Application for Prequalification

Impacted Parties

  • Capacity Providers
  • EMR Delivery Body

Related Changes

None

Contact information
Title Decoration

Lead Analyst:
Amy Stackhouse, Change Lead: Capacity Markets
[email protected], 020 7380 4221