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19/01/2022 News

Implementation of Mod 797 will save the non-Domestic market more than £100m in 2022/23

  • MOD 797 has been implemented, which means the non-domestic sector will not share costs of gas supplier failure in the domestic sector - and vice versa.
  • TotalEnergies Gas & Power has played an active role in this change being made, and believe this is the fairest way to attribute the costs.
  • MOD 797 will save more than £100m for the non-domestic market.

 

The energy industry has faced significant challenges in recent months, exacerbated by extremely high commodity prices in Q4, with more than 24 supplier failures since September 2021. When a supplier fails, a Supplier of Last Resort (SoLR) is normally appointed by Ofgem, a process that applies to both the domestic and non-domestic sectors.

A SoLR can recover costs of supply through a Last Resort Supply Payment (LRSP), which are recovered within the Transportation charges.

In gas, although most of the supplier failures have occurred in the domestic sector, the cost has not been targeted. This has meant that although much of the cost has been due to domestic market issues, the non-domestic market has been assisting in paying for this.

Over the last two years TotalEnergies has been working to address this, with the support of many non-domestic suppliers. In recent months TotalEnergies has worked closely with Ofgem to make the required changes before the rates for 2022-2023 are set and impact our customers.

MOD 797 has now been implemented, which will save more than £100m for the non-domestic market. Therefore in 2022 / 2023 the following charges will apply:

MOD 797 implementation