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How soon will approval of FMS procedures be granted following contract signing?

Paragraph 1.1 (FMS Proposals Response Notice) of Part A (FMS arrangements) of Annex 7 to the Conditions, states that as soon as reasonably practicable following the Agreement Date the Generator shall give to LCCC an FMS Proposals Notice.Paragraph 1.4 provides that LCCC shall, no later than twenty (20) Business Days after receipt of the FMS Proposals Notice, give a notice to the Generator (an “FMS Proposals Response Notice”). This notice will specify whether LCCC:

  1. consents to the Generator FMS Proposals;
  2. does not consent to the Generator FMS Proposals, in which case LCCC shall summarise its reasons for not consenting to the Generator FMS Proposals; or
  3. considers that it has not been provided with sufficient Supporting Information to determine whether to consent to the Generator FMS Proposals (and, in such circumstances, LCCC may request further Supporting Information from the Generator in connection with: (a) the Generator, the Facility and the Generator FMS Proposals; and (b) any potential amendments, modifications, supplements or replacements LCCC may require to be made to the FMS Procedures contained within the Generator FMS Proposals) (the “FMS Proposals Supporting Information”).

Where LCCC consents to the Generator FMS Proposals, such proposals will then be adopted as the FMS Procedures in respect of the relevant Project. Alternatively, where either (B) or (C) above applies, paragraph 1.6 of Part A of Annex 7 obliges LCCC and Generator to meet in good faith to seek to agree upon the FMS Procedures which should apply.

In practise we encourage Generators to contact us after having fulfilled the Initial Conditions Precedent to discuss the process for fulfilling the FMS requirements. LCCC considers it practicable to start the discussion early so that the Generator fully understands the requirements. However, we also recognise that some details of the FMS procedure are subject to the design of the facility being sufficiently advanced.

Generators should note that the FMS procedure forms part of the Further Conditions Precedent that must be fulfilled prior to generation and payment under the CFD contract.

LCCC has an agreement in place for Ofgem to provide FMS services.