Regulation 39 Calculation and publication of the levy rate

(1)

The Secretary of State must calculate the levy rate for each scheme year, expressed in pence per meter point per day (“the levy rate”), as follows—

\frac{L S}{\begin{matrix} (M \times A) & \times D \end{matrix}}

where—

(a)

A is the adjustment factor, as determined by the Secretary of State, used to predict the likely change in the number of meter points over the next scheme year,

(b)

D is the number of days in that scheme year,

(c)

LS is the levy size for that scheme year, calculated as follows—

L S = S B_{y} \pm A A_{y} \pm T Y_{y - 2} \pm T D_{y - 2} \pm Q L_{y \pm 1} \pm H_{y} \pm I_{y - 2} - S D_{y - 1}

where—

(i)

SB_y is the projected scheme expenditure for that scheme year, as determined by the Secretary of State,

(ii)

AA_y is the Authority’s forecasted administrative costs for that scheme year,

(iii)

TY_y-2 is the difference between the forecasted year end surplus and the actual year end surplus for the scheme year before the previous scheme year (“Y-2”) but excluding any year end deficit for Y-2 (“the true-up”),

(iv)

TD_y-2 is any year end deficit for Y-2,

(v)

QL_y+1 is the quarterly lag uplift in relation to the following scheme year (“Y+1”), being 25% of the difference between the projected scheme expenditure for Y+1 and the previous scheme year,

(vi)

H_y is the headroom figure for that scheme year, published in accordance with paragraph (4)(g),

(vii)

I_y-2 is the sum of interest—

(aa)

accrued on money held in the bank account referred to in regulation 40(5),

(bb)

paid in accordance with regulation 54(1)(a)(i), (ii) or (iii),

(cc)

payable in any scheme year in accordance with regulation 54(1)(a)(i), (ii) or (iii) and recovered by the Authority under regulation 58(g),

in Y-2,

(viii)

SD_y-1 is the forecasted year end surplus from the previous scheme year, and if no surplus is forecasted, the value for SD_y-1 is 0 (zero),

(ix)

the variables in paragraphs (i) to (viii) are expressed in pence,

(x)

in the calculation for the first scheme year, the value for QL_y+1 is 0 (zero),

(xi)

in the calculation for the first scheme year, and the calculation for the scheme year beginning with 1st April 2022, the value for each of TY_y-2, TD_y-2, and SD_y-1, is 0 (zero),

(xii)

in the calculation for the first scheme year, the value for SB_y is the projected scheme expenditure in relation to relevant producers (within the meaning given in regulation 17) for both the first scheme year and the first quarter of the scheme year beginning with 1st April 2022,

(xiii)

“year end surplus” and “year end deficit” mean the amount by which the sum of all amounts received by the Authority under this Part and Parts 9 and 10 excluding—

(aa)

amounts received under regulation 42 (levy credit payments),

(bb)

interest accrued on money held in the bank account referred to in regulation 42(4) (interest on levy credit payments),

(cc)

amounts received under regulation 57 (penalty notices),

(dd)

amounts recovered under regulation 58(f) (recovery of unpaid financial penalties as a civil debt), and

(ee)

in the case of a forecast year end surplus or year end deficit, interest accrued on money held in the bank account referred to in regulation 40(5) (interest on quarterly levy payments),

exceeds, or is exceeded by (as the case may be), the sum of all amounts expended by the Authority under these Regulations in relation to that scheme year,

provided that LS may not exceed the maximum levy amount for that scheme year determined and published under paragraph (6),

(d)

M—

(i)

in relation to the first scheme year, is the total number of meter points in the market on 31st May 2021,

(ii)

in relation to the scheme year beginning with 1st April 2022, is the total number of meter points in the market on 31st May 2021, but excluding any meter points served by a scheme supplier where the Secretary of State determines it is likely that at least 95% of the gas supplied by them in the scheme year beginning with 1st April 2022 will be certified biomethane, and

(iii)

in relation to the scheme year beginning with 1st April 2023 and each subsequent scheme year, is the total number of meter points in the market on 31st July preceding the start of that scheme year or such later date as the Secretary of State may determine, but excluding any meter points served by provisionally exempt suppliers in that scheme year.

(2)

The Secretary of State must publish the levy rate—

(a)

for the first scheme year, by 30th November 2021,

(b)

for the scheme year beginning with 1st April 2022, by 30th November 2021,

(c)

for the scheme year beginning with 1st April 2023 and each subsequent scheme year, by 31st December in the preceding scheme year.

(3)

The Secretary of State may review the levy rate—

(a)

for the first scheme year, and

(b)

for the scheme year beginning with 1st April 2022,

and, may, as a result of such a review, increase or decrease the levy rate provided that such increase or decrease must be published by the Secretary of State by 1st March 2022.

(4)

Subject to paragraph (5), the Secretary of State must publish the following, in relation to the first scheme year and the scheme year beginning with 1st April 2022, by 30th November 2021, and in relation to the scheme year beginning with 1st April 2023 and each subsequent scheme year, by 31st December in the preceding scheme year—

(a)

the adjustment factor referred to in paragraph (1)(a),

(b)

the projected scheme expenditure referred to in paragraph (1)(c)(i),

(c)

the forecasted year end surplus from the previous scheme year,

(d)

the Authority’s forecasted administrative costs, including its estimated administrative costs of carrying out a mutualisation process,

(e)

the true-up for the scheme year before the previous scheme year (“Y-2”), including any year end deficit for Y-2,

(f)

the quarterly lag uplift, being 25% of the difference between the projected scheme expenditure for that scheme year and the previous scheme year,

(g)

the amount which the Secretary of State determines is necessary to mitigate against uncertainties or unexpected events that would result in the funds available to the Authority for the purposes of the Scheme for that scheme year being less than the amount required by the Authority to make periodic support payments in relation to that scheme year (“the headroom figure”),

and where any value so published is increased or decreased as a result of a review carried out in accordance with paragraph (3), must publish the revised value by 1st March 2022.

(5)

The value of the following is 0 (zero)—

(a)

the forecasted year end surplus from the previous scheme year, in relation to the first scheme year, and the scheme year beginning with 1st April 2022, and

(b)

the true-up for the scheme year before the previous scheme year, in relation to the first scheme year, and the scheme years beginning with 1st April 2022 and 2023.

(6)

The Secretary of State—

(a)

must, before 30th November 2021, determine and publish the maximum amount that can be collected under this Part in any one scheme year (“the maximum levy amount”), expressed in pounds (£) and calculated as follows—

S B \pm A A \pm H \pm Q L_{y \pm 1}

where—

(i)

SB is the projected scheme expenditure for the scheme year beginning with 1st April 2028,

(ii)

AA is the Authority’s forecasted administrative costs for that scheme year,

(iii)

H is the forecasted headroom figure for that scheme year,

(iv)

QL_y+1 is the quarterly lag uplift, within the meaning given in paragraph (4)(f), in relation to the scheme year beginning with 1st April 2029,

(b)

may review the maximum levy amount at any time,

(c)

may, as a result of such a review, increase or decrease the maximum levy amount, provided that such increase or decrease—

(i)

may only take effect at the start of a scheme year, and

(ii)

must be published by the Secretary of State as soon as reasonably practicable.

(7)

The Authority must provide to the Secretary of State, in such manner and form and by such date as the Secretary of State may request, such information as the Authority may hold and the Secretary of State may require for the purpose of calculating the levy rate and the maximum levy amount in accordance with this regulation.

(8)

In this regulation references to the Authority’s administrative costs are references to the costs incurred by the Authority in connection with the performance of its functions under these Regulations.