Standard content for Members only
To continue reading this article, please login to your Utility Week account, Start 14 day trial or Become a member.
If your organisation already has a corporate membership and you haven’t activated it simply follow the register link below. Check here.
Ofgem has outlined plans to claw back more than £100 million in revenues from electricity distribution networks as part of the close down process for the RIIO ED1 price controls.
The regulator said it is minded to reduce their revenues by £84.5 million and £36.6 million respectively through re-openers for load-related expenditure and high value projects but increase them by £19 million through a re-opener for street works.
Although six of the distribution networks operators (DNOs) reported underspends against their allowances for load-related expenditure (LRE) over the ED1 price controls, only UK Power Networks (UKPN) proposed to return money to consumers under the associated re-opener in its closedown submission. The other five all claimed their underspends did not meet the thresholds for materiality.
UKPN claimed it owed £48.3 million to consumers but Ofgem has proposed to increase this figure to £76.2 million after disallowing some of its claimed deductions for spending on alternatives to load-related expenditure, in particular on flexible connections.
The regulator has also proposed to disallow deductions claimed by Scottish and Southern Electricity Networks (SSEN), with the result that its underspends would pass the materiality threshold in one of its licence areas and it would therefore owe £8.3 million to consumers.
It agreed that the underspends by the other four DNOs did not exceed their materiality thresholds.
Proposed returns to customers under LRE re-opener
Ofgem has also agreed with UKPN’s proposal to return £36.6 million to consumers through the re-opener for high value projects.
Four of the DNOs requested revenues under the re-opener for street works: UKPN claimed £1.6 million, National Grid Electricity Distribution (NGED) claimed £11.8 million, SP Energy Networks (SPEN) claimed £1.1 million and Northern Powergrid claimed £8.6 million.
The regulator has proposed to deny UKPN’s request entirely, reduce NGED’s adjustment to £11.1 million and reduce Northern Powergrid’s to £6.9 million.
The deadline for responses to its minded-to position is 2 August. Its final decision will be published at the end of September.
Please login or Register to leave a comment.