ENA calls for RIIO2 customer panels

Trade body responds to Ofgem’s open letter as planning for next regulatory settlement begins

The next regulatory review for energy networks should include expert panels of customer representatives and a review of companies’ public reporting requirements, according to the Energy Networks Association (ENA).

In its response to Ofgem’s open letter on the framework for RIIO2, ENA suggests setting up expert panels, including customer representatives, to operate throughout the next price control period, and contribute to the assessment of RIIO2 business plans.

ENA chief executive David Smith said: “Reliable energy supplies, world-class energy infrastructure and cutting edge innovation are as much consumer issues as anything else. We want to see a regulatory framework that ensures that consumers’ views on those things are all part of the conversation.”

ENA also calls for a review of the reporting requirements placed on networks, to ensure maximum transparency, and continued financial incentives for innovation.

With regard to risk and reward, the response states: “At this relatively early stage of the review process our members believe that no significant changes to the RIIO framework are required in order to better facilitate returns that are demonstrably good value for money for consumers.”

ENA also recognises the potential benefits of aligning the electricity transmission and distribution price controls, as has been mooted by Ofgem, but warns there could be unintended consequences.

“A thorough analysis of the costs, benefits and risks associated with any change to the current sequencing of electricity price controls would be required,” it adds.

“Fundamental to any future decision by Ofgem on this question is recognition of the legitimate expectations of investors, the business planning periods over which they have invested and future investor confidence in the regulatory framework and decision making process.”

Ofgem outlined a range of potential reforms to RIIO and warned networks to “prepare for tougher price controls” in an open letter to the industry in July. The deadline for responses was 4 September. The feedback will be used to inform a consultation on the structure of the RIIO framework which will be published in the first quarter of 2018.