30th Nov 2018 12:07
LONDON (Alliance News) - The UK energy regulator announced its new revised price controls for the financial 2020 year which will see revenue for energy network firms reduced by GBP827 million compared to its initial assumptions.
Ofgem published on Friday its annual iteration process report related to its Revenue=Incentives+Innovation+Outputs - or RIIO - price controls. The AIP report adjusts the amount of revenue networks can collect. This is based on the four price controls targeted by the regulator across gas and electricity distribution and transmission.
The current changes bring into force various changes previously announced by Ofgem. These include the September announcements that network providers can apply for additional allowances to cover extra costs as well as the voluntary return of GBP77 million of its price control funding by Western Power Distribution after the UK government cut back its fail electrification programme.
Revenues have also been reduced across all price controls after an update in the data set to calculate the cost of debt for network firms, which include FTSE 100-listed National Grid PLC. The revised data set has seen the cost of debt value fall, and will be reflected in the financial 2020 figures as well as restroactively on the financial 2019 values.
All told, the changes will see total network company revenue reduced by GBP827 million for financial 2020 compared to its initial assumptions when the current price controls started.
The current RIIO 1 price controls have been in place since 2013. The new RIIO 2 price controls come into effect from 2021.
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