Common Tariff Obligation / Hydro-Benefit Replacement Scheme
The Common Tariff Obligation
The Common Tariff Obligation ensures electricity suppliers in the north of Scotland do not charge comparable domestic customers different prices because of where they live. This is ultimately designed to protect those customers living in the north of Scotland from higher electricity charges.
The Common Tariff Obligation was originally set out in the Electricity Act 1989 and updated by the Utilities Act 2000, but no order was made under the legislation at the time. Following a public consultation in 2004, the Common Tariff Obligation became law preventing electricity providers from introducing price discrimination on the basis of location in the north of Scotland.
The Common Tariff Obligation was reviewed at the same time as the Hydro-Benefit Replacement Scheme.
The Hydro-Benefit Replacement Scheme
The Hydro-Benefit Replacement Scheme is designed to protect consumers from the high costs of distributing electricity in the north of Scotland. The scheme is funded by charges on suppliers across Great Britain.
A review of the scheme took place in 2008. DECC published a 'minded to' statement on 1 July 2009 explaining that the scheme was still meeting its original policy objectives and would therefore continue unchanged until the next review in 2011.
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