Network regulation – the 'RIIO' model
Network companies are monopoly businesses, you don’t normally get to choose which one you use. So Ofgem sets price controls – a ceiling on the amount companies can earn from charges to use the networks. We do this to protect consumers and ensure they get value, and to also make sure companies operate the network efficiently and sustainably, while they make a return.
RIIO (Revenue=Incentives+Innovation+Outputs) is Ofgem’s performance-based framework to set the price controls.
The energy network is the system that brings energy to homes and businesses. Learn how it fits together and how we ensure consumers get the services they need at the lowest possible cost.
The current network price controls for gas and electricity transmission (RIIO-T1) and gas distribution (RIIO-GD1) run from 2013-2021, and for electricity distribution (RIIO-ED1) from 2015-2023.
RIIO-2 will be the next price controls for the network companies running the gas and electricity transmission and distribution networks. They'll start from 2021.