Citizens Advice response to Ofgem’s consultation on Draft determinations: Advanced Procurement Mechanism (APM) re-opener
Support for the APM
We would like to stress our overall support for both the principle of the Advanced Procurement Mechanism (APM), and the design of the mechanism itself. In a time of increasing transmission investment, and with inflation currently above-target, the APM could act as a valuable tool to secure needed supplies early, and reduce the overall cost for consumers. We also note that this re-opener will not increase consumer bills as the APM cap remains at £4 billion (in 2023/24 prices).
Bespoke allowances
We recognise that there is a risk in declining TO requests for increased bespoke allowances, or in delaying their approval. Either action could mean that essential build will overrun in cost or timing, and ultimately increase constraint costs for consumers. However, as Ofgem has acknowledged, the risk of stranded assets must also be considered. This is especially relevant to bespoke procurement, as the possibility of interoperability or redeployment is reduced. To fairly balance between companies and consumers the risk of inefficient planning, Ofgem could introduce a mechanism alongside increased bespoke allowances that shares the cost, rather than fully passing through.