RIIO-2 Network Asset Risk Metric reporting and closeout

The Network Asset Risk Metric (NARM) links network company funding to the delivery of risk reduction through asset management activities.

This page provides the documents that electricity transmission, gas transmission and gas distribution licensees need to report their RIIO-2 NARM performance. It also explains the methodology the Authority will apply when assessing delivery at closeout.

The NARM Regulatory Instructions and Guidance explain how licensees should complete the NARM Regulatory Reporting Pack. The associated reporting templates specify the information that licensees must provide.

For Year 5, licensees should use the final NARM RRP template published with the RIGs. The RIGs also explain the alternative arrangement under which Ofgem will accept the same principal template version used by a licensee for its Year 4 submission, subject to the specified information, reconciliation and assurance requirements.

The NARM RIIO-2 Closeout Methodology Guidance explains how the Authority will:

• assess delivery against Baseline Network Risk Outputs
• treat Non-Intervention Risk Changes
• assess Clearly Identifiable delivery elements
• apply sector-specific deadbands
• assess justification for over-delivery or under-delivery
• consider RIIO-2 and RIIO-3 crossover projects
• calculate final allowed NARM expenditure and any applicable penalties

The closeout methodology guidance reflects the Authority’s decisions following consultation. The consultation responses and decisions are available on the related consultation outcome page.