The proposal is based on substantially rolling over the existing scheme for one year and is based on a target for external System Operator costs of £460 million. If costs for the year outturn below this level, National Grid is eligible to receive 60 per cent of the benefits, up to a maximum profit of £60 million. If costs are above the target, National Grid is exposed to 50 per cent of the losses, up to a maximum loss on the scheme of £45 million.

Further details of the proposal are available on the Ofgem website

Acceptance of the final proposal is subject to agreement between National Grid and Ofgem on the detailed amendments to the Transmission Licence needed to bring these proposals into force.