Ofgem increases scrutiny of network RIIO2 business plans

Ofgem will be holding its first public meetings to scrutinise network companies’ business plans as part of the upcoming RIIO2 price control round.

The regulator announced today (29 November) it will be holding a series of open hearings, which are designed to increase scrutiny of the regional monopoly networks, in the spring of 2020 once the RIIO2 price control plans for 2021-2026 have been submitted.

An Ofgem spokesperson confirmed they are the first such public scrutiny meetings to be organised by the regulator.

The remit of the gatherings will address questions on areas of contention raised by an independent panel, also announced today, which has been set up to challenge the price control business plans currently being developed by the network companies. The meetings will also address other stakeholders’ concerns.

The independent panel will be chaired by Roger Witcomb, who led the Competition and Markets Authority’s investigation into the GB energy market, the report of which was published in 2016.

Whitcomb was also chair of the Competition Commission from 2011 to 2014 before which he was finance director of National Power and on the board of Anglian Water.

The regulator wants the panel to challenge the network companies on how consumers’ needs and views are being considered as it is developing their business plans.

The panel will produce an independent report for Ofgem on its views of the companies’ plans.

Its membership also includes former Ofgem policy managing director Bob Hull, Which? deputy CEO Helen Parker, Electron co-founder Jo-Jo Hubbard, Imperial College London professor of energy systems Goran Strbac and Sharon Darcy, director of thinktank Sustainability First.

Ofgem has said the next set of the RIIO price controls is designed to deliver lower network costs for consumers while accommodating new challenges such as the anticipated increase in the take-up of electric vehicles.

Jonathan Brearley, Ofgem’s executive director for systems and networks, said: “Consumers deserve robust and cost-effective business plans from energy network companies. The advice of the challenge panel will help us assess whether the plans deliver the services that customers expect from the networks in the next decade.”

Witcomb said: “Energy networks play a vital, and increasingly important role in a smarter energy system. I am looking forward to working with the other panel members to make sure that the companies are putting consumers at the forefront of their plans for managing the major changes in how we generate and use energy.”