My Lords, I am grateful to the Minister and also to the noble Baroness, Lady Maddock, for her support.
It is certainly true that there have been general indications of the Government’s direction. No doubt they are taking into account the DNOs in drawing up their plans. It still strikes me as very odd that we have here a piece of legislation, the capacity mechanism bit of which we are discussing now but the detail of which is not yet known, and it will require considerably more explanation before we finish this Bill and some serious delegated legislation thereafter. If it applies to DNOs—as the Minister rightly says in a sense it will—it must have implications for how DNOs operate. The outcome of the demand reduction must have implications. The way in which the capacity mechanism brings other people into play in the grid, and ultimately down the distribution system, must have implications. Therefore, I still find it very odd, even if they have read all the
signals right—and my brief reading of the 700 pages of the Western Power document suggests that they may have missed one or two.
I am not necessarily objecting to the eight-year period, but that period has to relate to something that is operating under the wider electricity market reform. Instead, we are going to have the approval of the DNO strategic plans within the next two or three months before we know how the capacity mechanism is working, before we know how the demand reduction mechanisms are working and before we know a lot of other detail that will emerge from this Bill, which will eventually be encapsulated in the new strategy and policy statement from the Secretary of State. That will be the context in which Ofgem and the industry will have to work.
I am not trying to be awkward with the Government. I just do not think that they have the pieces in the right order or in the right place. Before we complete the consideration of this Bill, we need to be a bit clearer on how the distribution structure will operate in the new system. We should not have Ofgem definitively endorsing the plans, which it will have before it in a couple of weeks. In the mean time, I beg leave to withdraw the amendment.