The Assistance for Areas with High Electricity Distribution Costs Scheme was introduced in the Energy Act 2004. It replaces an earlier arrangement, commonly referred to as “Hydro Benefit”, which ended in January 2004 (although this continued on a voluntary basis until 31 March 2005).

The intention of the Scheme is to reduce the costs to consumers of the distribution of electricity in certain areas. Currently the only Specified Area is the North of Scotland. National Grid therefore recovers an Assistance Amount through the Scheme, which is passed to the Relevant Distributor in the Specified Area, Scottish Hydro Electric Power Distribution Ltd. This enables distribution charges to be reduced.