The next price control for electricity distribution network operators (DNOs) is expected to commence on 1 April 2015.
To formulate distribution price controls we have to obtain a clear understanding of the DNOs’ costs. And we need to compare the performance and efficiency of different companies so that appropriate allowances can be set.
We collect annual cost information from each of the regulated companies. The cost data is reviewed in depth so we are sure of its consistency and accuracy.
Working in this way we aim to:
- put cost data from the different systems used by distribution companies into a comparable form for price control reviews
- spread the costs of providing price control information across a number of years and avoid the need for a major back-capture exercise when the next price control needs to be developed
- build an understanding of how distribution costs are driven, and affected by management choices
- provide regularly updated information on costs for internal and external users.