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Regulatory treatment of CLASS as a balancing service in RIIO-ED2 network price control

Thank you for participating in our consultation.

We are consulting on our minded-to position for the regulatory treatment in RIIO-ED2 of DNOs providing network voltage control and network management services, via the remote management of deployed network assets, to the ESO for its balancing services activity. This service is commonly known as CLASS.  We welcome views from a wide range of stakeholders including providers of flexibility services, DNOs, the ESO, consumer groups and others with an interest in energy networks and flexibility.

For all questions please provide your reasoning and evidence.
Are there other options we should have considered? Please provide reasons.
Do you agree that market based mechanisms can provide the most efficient incentive for CLASS participation in balancing services?
What is your view on DNOs’ sharing profits with consumers, even if this means consumers are also exposed to DNOs’ losses (including how this might affect DNOs’ competitive behaviour noting this is different to other providers of balancing services)?
How might limits on charges to the ESO in DRS9 affect investment and utilisation signals for CLASS?
Do you agree that requiring CLASS in the price control would not promote efficient investment signals in CLASS and could distort competitive outcomes?
Do you have evidence that CLASS could increase the likelihood of system reliability issues?
Do you have evidence competition is currently being distorted or impeded by the participation of CLASS? Do you agree with our assessment that it is unlikely DNOs have or would have market power in future, and the reasons we have provided in Appendix 2?
What information could the DNO have privileged access to that that could offer it an unfair advantage in balancing services provision? How might this change in future if the DNO and ESO increasingly coordinate?
What measures would you consider effective and proportionate to ensure that privileged information the DNO has access to is not used inappropriately to benefit the commercial performance of CLASS?
In what other ways do you think DNOs could take advantage of their DNO role in the context of providing balancing services with CLASS?
How far do you think existing safeguards (including licence obligations and competition law) against DNOs taking advantage of their DNO role in the context of participating in the balancing markets with CLASS are sufficient?
What additional measures would be effective and proportionate to address actual or perceived risks of DNOs taking advantage of their DNO role?
Are there other specific effects to competition that are relevant to our decision? What effects would these have on consumers?