Proposed closeout methodology for Network Asset Risk Metric and RIGs: RIIO2

Consultation description

We are consulting on our proposed methodology to make sure it is clear, proportionate and can be applied consistently across electricity transmission, gas transmission and gas distribution.

The methodology explains how we will:

• assess delivery against baseline risk outputs
• determine funding adjustments
• apply penalties where delivery is below expectations
• treat clearly identifiable elements, changes in risk outside companies’ control, and projects that extend into RIIO‑3 price controls

We are also consulting on proposed modifications to the NARM Regulatory Instructions and Guidance (RIGs) and reporting templates. These templates will form the basis for companies’ NARM closeout submissions. We are consulting on the methodology and the RIGs together so companies can see how the closeout assessment process and the reporting requirements fit together.

Network companies can use the methodology, RIGs and reporting templates to prepare their NARM closeout reports. Companies must submit their NARM closeout reports under Special Licence Condition 3.1 by 31 October 2026.

The methodology should be read alongside:

• the NARM Handbook v4.0
• relevant RIIO‑2 licence conditions
• Regulatory Instructions and Guidance (RIGs)

Who should respond

We would like views from:

• electricity transmission licensees
• gas transmission and gas distribution networks
• anyone with an interest in network asset risk, regulation, and RIIO price controls
• anyone involved in regulatory price control closeout, asset management, regulatory reporting and NARM

How to respond

Submit your response by 24 June 2026 by emailing assetriskresilience@ofgem.gov.uk.

Please include ‘NARM RIIO‑2 close‑out methodology consultation’ in the subject line.

Note: Some documents listed below are not fully accessible. If you require an alternative format, please contact assetriskresilience@ofgem.gov.uk.