The Scottish Government

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Chapter 3: Analysis Of Questions

1. This chapter sets out the three questions posed in the consultation document and analyses the level of response given to each. The chapter will also highlight the range of answers to these questions.

The three consultation questions

2. The consultation posed three questions relating to the proposed level of fees payable under the Electricity (Applications for Consent) Scotland Regulations 1990. They were:

• Do you agree that the revised scale of fees detailed in Annex A should be introduced?
• Do you agree that arrangements should be introduced to compensate planning authorities for the costs they incur in processing Electricity Act consents cases?
• Do you agree with the proposed reimbursement arrangements?

3. Most respondents to the consultation did so by completing the consultation questionnaire or drafting letters following its format. A small proportion did not answer the questions directly but it was possible to draw conclusions from their responses. All responses received answered each question (with the obvious exception of the two nil-returns).

4. The table below outlines the percentage of respondents who agreed or disagreed with each question.

Question 1 - Do you agree that the revised scale of fees detailed in Annex A should be introduced?

5. A clear majority of respondents were in favour of the revised scale of fees set out in the consultation paper . When analysed by group, local authorities showed a clear majority in favour of the introduction of the fee schedule with 11 voting yes and 2 voting no. The response from companies was less clear cut - 50 % in favour of the schedule and 50% against.

6. There was a variety of reasons provided by those who objected to the fees schedule. One believed that the application and consents process needed simplified with the costs lowered, and that the proposed changes did nothing to rectify this.

7. Others stated that developers in Scotland already face higher costs as they have to apply to Scottish Ministers for consent for hydro-electric schemes above 1MW. A correspondent states: "Given the interest amongst developers in developing smaller projects such as run of river developments or new marine energy developments, we are of the view that additional funding bands would be needed to reflect more accurately the cost of considering applications from smaller schemes."

8. The issue of fees for section 37 was also raised. It was considered that cases should be based on distance rather than voltage as it is distance which increases the difficulty of assessing applications and creates controversy with the general public.

9. A final point raised by all who responded to this question was that additional bandings be created for section 36 developments below 100 MW. The fees schedule outlines that a fee of £15,000 will be charged for the construction or the construction and operation of a generating station not exceeding 100 MW. Some respondents would like to see this broken down into further bands with lower differing fees charged:

"Given the interest amongst developers in developing smaller projects such as run of river developments hydro or new marine energy developments, we are of the view that additional funding bands would be needed to reflect more accurately the cost of considering applications for smaller size schemes and not discouraging these smaller size schemes from coming forwards. We therefore propose that the current fee level (£5,000) should be maintained for section 36 projects up to 10MW, and that a fee level of £10,000 be set for projects of between 10 and 50MW."

Question 2 - Do you agree that arrangements should be introduced to compensate planning authorities for the costs they incur in processing Electricity Act consents cases?

10. There was a clear majority in favour of this proposal with 77% returning a yes answer. It can therefore be concluded that amongst those who responded, it is recognised that planning authorities do not receive a fair settlement under the present regulations.

11. The 4 consultees who are against introducing the arrangements to compensate planning authorities for costs incurred included two companies, a local authority and a trade body. Both companies and the trade body considered that the scale of compensation outlined is prohibitive to renewable energy construction.

12. The local authority against introducing the arrangements raised concerns which will be dealt with in the section analysing question 3.

Question 3 - Do you agree with the proposed reimbursement arrangements?

13. Around 73% disagreed with the proposed reimbursement arrangements. Disagreement however, was not centred on any one group.

14. The reasons given for disagreeing with the proposals show a high degree of consensus by the respondents. This is perhaps not surprising given the relatively small and focussed nature of those who responded.

15. The main issue raised by those who negatively responded was the issue of a four month time limit to complete applications in order to claim maximum re-imbursement from the Executive. After four months, planning authorities would receive a reduced fee. This issue was highlighted as being inappropriate by the vast majority of those who responded. Only one responder explicitly agreed that the four month limit was an appropriate measure to implement.

16. Typical responses to the 4 month limit included:

"The intention to link payment of the full fee to performance is [equally] unacceptable and creates an unwelcome precedent. An extended period in processing applications involving environmental statements, particularly wind farms, is often due to the applicants having to provide additional information…"

"An unintended side effect could be that a perverse incentive would be created for local authorities to respond in the 4 month period where there genuinely are unresolved issues, and this may result in more "holding" objections being made when a favourable response would have been given more time."

17. A concern was also raised in relation to the proposal that Local Authorities submit an invoice to the Executive with a detailed breakdown of the costs incurred by them. Over half of the 26 consultation responses stated this was an unreasonable recommendation.

18. The main reason given for these objections was that it would produce an overly demanding level of accounting that does not exist at present. Planning authorities are concerned that the need to produce a detailed cost breakdown for the work they carry out on each application would place them under an administrative burden.

19. Local authorities were also concerned that they would be paid retrospectively for work they carry out on applications. Under the proposals, developers would pay the full fee to the Executive when an application is made and once completed, they would be required to submit an invoice providing a record of the costs they had incurred. The Executive would then reimburse a portion of those costs back to the planning authorities.

20. There were several suggestions on alternative methods of reimbursement. Some local authorities indicated they would prefer an upfront fee to be paid to them when an application is received by the Executive. This would prevent difficulties arising when an application is not completed in the same financial year. Others suggested that local authorities could still be paid retrospectively without the need to submit a detailed breakdown of the costs incurred.

21. A further issue raised was the proposal not to reimburse planning authorities for an overhead line which requires an EIA but has a voltage not exceeding 132KV. Local authorities believe this should not be the case and that they should be reimbursed for all schemes that involve an EIA.

Summary

• This chapter considered the findings and comments received about the consultation.
• There is agreement that planning authorities should be compensated for the costs they incur in the processing of Electricity Act applications. There is also broad agreement that the schedule of fees payable by section 36 and section 37 applicants is correct.
• However, respondents of all groups raised concerns over the proposed arrangements for reimbursement. These concerns are:

• the four month time limit in which to claim full reimbursement
• a need to provide the Scottish Executive with a detailed breakdown of the costs incurred
• that section 37 applications are based on voltage and not distance
• that no fee is recovered for overhead lines not exceeding 132kv.

Executive Summary

Chapter 1: Introduction

Chapter 2: Analysis of Responses

Chapter 4: Conclusion

Annex A: Consultation Paper

Annex B: Distribution List