Customised price-quality path fast track processes
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We fast tracked the review of certain CPP requirements to provide greater certainty and improvments for potential CPP applicants considering submitting a CPP application during, or immediately after, the wider IM review.
The fast track process comprised of two separate limbs of work each with different timeframes and topic areas.
Limb 1 – Changes affecting the preparation, assessment and determination of CPP applications
Introducing flexibility for suppliers through:
modifications or exemptions to the process for preparing, and content of, CPP proposals
allowing the use of alternative methodologies with equivalent effect (AMWEEs) for proposing a CPP.
Accepting CPP applications for consideration if they comply with the process and content IMs “in all material respects”.
Clarifying which IMs apply if IM amendments are made after a proposal is accepted as complete but before a CPP is determined.
Limb 2 – The alignment of the weighted average cost of capital (WACC) for CPPs with the prevailing WACC for default price-quality paths (DPP)
An Amended Notice of Intention was published On 9 October 2015 to explain that the issues considered under Limb 2 of the CPP fast track were no longer being progressed in the fast track and would instead be considered in the main input methodologies review. This decision was taken as there was no longer a pressing need to resolve the alignment issue sooner than December 2016 following Powerco’s deferral of its CPP application beyond this timeframe.