RIIO-GD1 Financial Model

Overview

The RIIO-GD1 Price Control Financial Model (‘PCFM’) is used to calculate values for the Base Revenue (the term MOD) that appears in the formula for each licensee’s Base Distribution Network Transportation Activity Revenue.  The calculations are carried out as part of the Annual Iteration Process for the PCFM.

Caveat: The PCFM is designed to produce values for the term MOD by recalculating base revenue figures using revised variable values.  It does not deal with the other components that count towards the licensee’s Maximum Distribution Network Transportation Activity Revenue that are set out in Part B of Special Condition 1B  of the Gas Distribution Licence.  Therefore, the PCFM should not, by itself, be considered a comprehensive model of the allowed revenue position for the licensee.

Annual Iteration Process and functional changes to the PCFM

Each year the table of variable values within the PCFM is revised as part of the Annual Iteration Process in accordance with applicable methodologies contained in the Special Conditions of the Gas Distribution Licence and the GD1 Price Control Financial Handbook.  Functional changes to the PCFM can only be made in accordance with the governance regime contained in Special Condition 4A of the licence.   Superseded versions of the PCFM are archived in these pages, but only the most recent version of the PCFM should be used for purposes that call for the most up to date position.

Below are the practical procedures for the Annual Iteration Process (AIP) that will take place by 30 November each year to calculate the value of MOD that will apply in Formula Year which starts on the first of April the following year (for example the AIP in November 2013 calculates the value of MOD that will apply in the formula year 2014/15).

Practical procedures for the Annual Iteration Process (AIP)        

RIIO Gas Distribution

The formal Annual Iteration Process is run by the Authority, but stakeholderscan ‘dummy run’ the process for themselves by following the practical procedures below.

  1. In the 'Userinterface' sheet under the heading 'PCFM year t', select 31 March 2015, since the process will calculate the value of MOD to be applied in Formula Year 2014/15.
  2. In the 'Userinterface' sheet under the heading 'Active Company' select the designator for the licensee.
  3. Update the PCFM Variable Values (‘blue box values’) on the Input Sheet for the designated licensee in accordance with revisions directed by the Authority - a consolidated direction of values will have been issued by the Authority by 30 November’.
  4. In the 'Userinterface' sheet under heading 'Model Status', select model status ‘Licence Model’.
  5. Repeat items  2-4 for other licensees as required, for example to obtain MOD values for other licensees within an ownership group.
  6. Press the ‘Run for All’ macro button (or alternatively the ‘Run for One button’ if only one licensee’s MOD value is being calculated).

The MOD value for each licensee will be recorded in the SavedResults sheet for the Formula Year 2014/15 under the heading ‘Recorded MOD’.

Publications and updates

  • Published: 30th Nov 2015
  • Guidance
  • 1 Associated documents
This is the RIIO-GD1 Price Control Financial Model following the Annual Iteration Process that took place by November 2015.

  • Published: 30th Nov 2015
  • Charts and data
  • 1 Associated documents
This model calculates the Cost of Debt variable value for all four Price Controls for AIP 2015.

  • Published: 13th Nov 2015
  • Guidance
  • 0 Associated documents
Under the provisions of Special Condition 2A of the Gas Distribution Licence, the authority publishes a schedule of modifications to the GD1 Price Control Financial model (PCFM) following the Annual Iteration Process(AIP) in November 2013.

  • Published: 13th Nov 2015
  • Guidance
  • 1 Associated documents
GD1 Price Control Financial Model for the Annual Iteration Process that will take place by 30 November 2015.

  • Published: 28th Nov 2014
  • Guidance
  • 1 Associated documents
RIIO – GD1 Price Control Financial Model following the Annual Iteration Process 2014

  • Published: 25th Nov 2014
  • Guidance
  • 1 Associated documents
This is the Cost of debt indexation model 31 October 2014 issued under RIIO Price Control.

  • Published: 18th Nov 2014
  • Guidance
  • 1 Associated documents
RIIO GD1 Price Control Financial Model for the Annual Iteration Process that will take place by 30 November 2014.

  • Published: 29th Nov 2013
  • Reports and plans
  • 2 Associated documents
This copy of the GD1 Price Control Financial Model (PCFM) shows the changes to the licensee’s Base Revenue (the MOD value). This has been directed as a result of the Annual Iteration Process that took place by 30 November 2013.

  • Published: 27th Sep 2013
  • Other
  • 2 Associated documents
On 27th September 2013, Ofgem published modifications to the RIIO-GD1 Price Control Financial Handbook and Price Control Financial Model (PCFM).  These notices modified the Handbook and PCFM from the original versions in effect at 1 April 2013 (the start...

  • Published: 27th Sep 2013
  • Other
  • 1 Associated documents
The governance process contained in Special Condition 2A of the Gas Distribution Licence provides for modification of the Price Control Financial Handbook and Price Control Financial Model during the RIIO-GD1price control period.  A summary of any such...

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