Some aspects of electricity distribution activity are susceptible to competition (such as connections and metering) while other areas are not.
The regional distribution networks are natural monopolies and, as the industry regulator, we administer a price control regime which ensures Distribution Network Operators (DNOs) can, through efficient operation, earn a fair return on their activities while controlling the end cost to consumers.
We monitor companies’ compliance with the price control through the licence conditions held by each DNO and can take enforcement action if these licence requirements are breached.
The current price control (referred to as RIIO-ED1) runs from 1 April 2015 to 31 March 2023.
We are undertaking the current RIIO-ED1 price control review for the price control period starting on 1 April 2015.
The RIIO model (Revenue = Incentives+Innovation+Outputs) builds on the success of the previous RPI-X regime, but better meets the investment and innovation challenge by placing much more emphasis on incentives to drive the innovation needed to deliver a sustainable energy network at value for money to existing and future consumers.