Changes to electricity distribution System Operation incentive governance document and Regulatory Instructions and Guidance (RIGS) annex: (RIIO-ED2)
Decision
- Publication date
- Industry sector
- Distribution Network
The DSO incentive was to be made up of three evaluation criteria:
- stakeholder survey
- performance panel assessment
- three outturn performance metrics
However, it was not possible to implement the performance metrics part of the incentive for RIIO-ED2. This was due to concerns with data quality a lack of historical data and methodological issues.
For the introduction of the incentive, we developed guidance. The guidance was set out in the Distribution System Operation Incentive Governance Document. The Governance Document outlines the processes and criteria used to assess performance; the reporting requirements; and the methodology we will use to determine an incentive reward or penalty.
As the performance metrics have been removed from the incentive, we needed to amend the Governance Document to reflect this. The first year of operating the DSO incentive has highlighted a number of areas where improvements could be made. We consulted on a number of proposed changes to the Governance Document and our Decision reflects the outcome of the consultation.
The current RIGs contain reporting requirements for the performance metrics for the DSO incentive. These requirements needed to be amended to reflect that the performance metrics have been removed from the incentive. We worked with the DNOs on new reporting requirements that seek to provide more quantified performance metrics for the next control period. We proposed adding three new reporting requirements to the RIGs and consulted on those. Our Decision reflects the outcome of the consultation.