Innes GardenInnes Garden

EP Charges Programme Manager

PPC ChargingPPC Charging

• Discussion Document

• Follows on from previous consultations

• Proposing charge calculated from OPRA Score

– Different attribute bands awarded weighted scores

– Reflects contribution to effort expended by the Agency.

PPC Charge CalculationPPC Charge Calculation

EP OPRA Score

PPC Charge

EP OPRA OutputEP OPRA OutputAttribute “Band Score”

A B C D E

Complexity

Emissions AirWaterLandThird Party waterThird Party Land

Location

OperatorPerformance

Consultation Look Up TableConsultation Look Up TableCharge MultipliersCharge MultipliersAttribute Band Score

A B C D E

Complexity Note each activity is scored 2 10 20 45 80

Emissions Air 3 5 10 20 30Water 3 5 10 20 30Land 3 5 10 20 30Third Party Water 1 2 3 5 10Third Party Land 1 2 2 5 10

Location 3 10 20 40 60

OperatorPerformance

10 15 20 35 50

Attribute Band ScoreA B C D E

Complexity 2 10 20 45 80

Activity 1

Activity 2

Activity 3

Activity 4

Activity 5

(Remembercapping rulesmay apply)ComplexityScore

2* 2= 4

1 * 10= 10

1 * 20= 20

1 * 45= 45

0

Sub Total 79Emissions

Air 3 5 10 20 30

Water 3 5 10 20 30

Land 3 5 10 20 30

3rd Party Water 1 2 3 5 10

3rd Party Land 1 2 3 5 10

Emissions Score 1 * 3= 3

5 * 2= 10

1 * 3= 3

1* 20= 20

0

Sub Total 36Location 3 10 20 40 60

Location Score= 20

Sub Total 20OperatorPerformance

10 15 20 35 50

Operator Score= 15

Sub Total 15

ChargeCharge

The total EP OPRA score = 150.

Say

the Application Charge Multiplier was £160

and

the Subsistence Charge Multiplier was £60

this would give the following charges for this permit:

Application Charge: - £24,000

Subsistence Charge: - £9,000

Charging OptionsCharging Options

Process Charging Approach ChargeApplicationCharge

EP OPRA based charge i.e. variableaccording to attribute scores.

EP OPRA Score *Application ChargeMultiplier

Subsistence charge EP OPRA but modified by a “subsistencefactor”.

EP OPRA Score *Subsistence ChargeMultiplier

Standard variationcharge

EP OPRA but modified by a “standardvariation factor”. Applies only to thoseactivities being modified.

EP OPRA Score *Standard Variation ChargeMultiplier

Partial transfercharge

Partial Transfer Fee(lower) if no FAPPPartial Transfer Fee(higher) if FAPP

Full transfercharge

Full Transfer Fee (lower)if no FAPPFull Transfer Fee (higher)if FAPP

Partial surrendercharge

Partial Surrender Fee(lower) if no FAPPPartial Surrender Fee(higher) if FAPP

Full surrendercharge

It is proposed to use fixed charges foreach of these categories for simplicity.

Two rates however will be provided foreach of these types depending on whetheror not a new Fit and Proper Person (FAPP)assessment must be made as a result of theapplication. Additional charges incurred byFAPP assessment are explained below.

Charges for a partial transfer to aninstallation will be higher than that of a fulltransfer. This is because the Agency mustassess the new operational and managerialinterdependencies between the twooperating companies involved.

Full Surrender Fee (lower)if no FAPPFull Surrender Fee(higher) if FAPP

Main Points Raised So FarMain Points Raised So Far• It’s Complicated

• Timescales - too tight/long overdue

• What is overall impact on charges

• Insufficient reward for good Operator Management

• Implications for small businesses/farmers

• More simplified standardised permits

• Monitoring - individual sites should pay

• Want transparency of basis for charges

• Emissions - a tax

• Not enough reward for in-house EMS

• Location - penalise operators for planning issues

Any more issues?

Agency ReasoningAgency Reasoning

• Much not included in Discussion Document to keep as simple and short(ish)

• What follows is some of our reasoning

• But we are here to listen!

• We would welcome feedback

It’s ComplicatedIt’s Complicated• Yes! - But so is interim scheme!

• Needs to cover very wide range of installations and circumstances

• Replacing 3 existing schemes with 20+ tariffs types

• Spreadsheet/electronic application to simplify

• Why are we doing this:-

– Agency wants to directly link environmental risk to workplans to charges

– Improves cost reflectivity

– Integration & Efficiency

– Signal to operators

Timescales -Timescales -

• IPC OPRA for several years

• PPC Charging consultation in 1999

• Support in principle for OPRA based charging

• Desire to move to risk based regulation

• FMPR recommendation - risk based charging by start of F/Y 2003/04

• Delays in implementing IPPC and Landfill Directives

• Waste OPRA only for 2 years

• Need to develop EP OPRA system

• Need to do charge modelling

• Consultation

• Training of staff

“long overdue” or “too tight”

What is overall impact on chargesWhat is overall impact on charges

• Overall cost neutral

– We are only allowed to recover our costs

• Improved OPRA scores

– Reduced effort by Agency

– savings returned to charge payers

Insufficient reward for good Operator Insufficient reward for good Operator Management Management • Charges must reflect Agency effort

• Complexity

– Understand installation and industry sector issues

– Is correct technology being used

– Compliance issues (and costs) for companies

• Emissions & Location

– Understand environmental impacts

– Credibility and acceptance by public

• “Phasing in” of system to

– accommodate those who will pay more

– help reduce impact of uncertainties

Implications for small businesses & farmersImplications for small businesses & farmers

More simplified standardised permits More simplified standardised permits

• Low Impact Installation provisions continue

• Low risk installations pay less than current one component charge

• Option for farmers to go for Standard Farming Permits

• Where appropriate we are looking to extend Simplified Standard Permitting arrangements

• Charge is related to environmental risk not size

Monitoring - individual sites Monitoring - individual sites should payshould pay• Agency position neutral

• Inconsistency within PPC

– IPC based process invoiced individually

– Waste sites cost recovered through general subsistence charge

• Agency moving to self monitoring hence less check monitoring and lower costs

• Most sites will require check monitoring at some point so potential for periodic larger bills if charged separately.

Want transparency of basis Want transparency of basis for chargesfor charges

• So does Agency!

• Links from OPRA to work plans to charges should help demonstrate:-

– As monopoly supplier shows principles by which we operate

– Reasons for charge down to individual site level

• What more information would be helpful?

The Following are mainly EP OPRA issues but:-

Emissions - a tax

•Use of Emission indices means that it is a surrogate for environmental harm, not directly related to releases

Not enough reward for in-house EMS

•Section 4 guidance to Agency is to encourage moves to use of EMAS and ISO 14001

Location - penalise operators for planning issues

•Factors such as SSSI, Habitat sites and population effects Agency effort in assessing applications and in compliance.