RIIO-T1 Financial Model (Gas)

Overview

The RIIO-GT1 Price Control Financial Model (‘PCFM’) is used to calculate values for the Base Revenue (the MOD value) that appears in the formula for each licensee’s Base National Transmission Service (NTS) System Operation Revenue or Base NTS Transportation Owner 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 NTS Transportation Owner Revenue, as set out in Part C of Special Condition 2A of the Gas Transporter Licence or
  • Maximum NTS System Operation Revenue , as set out in Part C of Special Condition 3A of the Gas Transporter 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 Transporter Licence and the GT1 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 Superseded versions of the PCFM are archived in these pages, but only the most recent version of the PCFM should be used for purposes that call for the most up to date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 Transmission

The formal Annual Iteration Process is run by the Authority, but stakeholders can ‘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: 5th Sep 2019
  • Charts and data
  • 1 Associated documents
This is the GT1 Price Contol Financial Model for the Annual Iteration Process that is planned to take place by 30 November 2019.

  • Published: 4th Sep 2019
  • Decisions
  • 1 Associated documents
Direction to modify the GT1 Price Control Financial Model by amending two labels

  • Published: 6th Aug 2019
  • Open letters and correspondence
  • 3 Associated documents
Proposed modifications to the GT1 Price Control Financial Model to amend an incorrect label

  • Published: 30th Nov 2018
  • Decisions
  • 1 Associated documents
Directions issued in respect of the Annual Iteration Process which took place by 30 November 2018 for the RIIO-GT1 Price Control Financial Model.

  • Published: 30th Nov 2018
  • Decisions
  • 1 Associated documents
This model will calculate the Cost of Debt variable value for all four Price Controls for the AIP 2018.

  • Published: 30th Nov 2018
  • Decisions
  • 1 Associated documents
This is the GT1 Price Control Financial Model following the completion of the Annual Iteration Process in November 2018.

  • Published: 22nd Nov 2018
  • Guidance
  • 0 Associated documents
List of all PCFM modifications between AIP 2016 and the publication of the PCFM for use in AIP 2018.

  • Published: 26th Oct 2018
  • Guidance
  • 5 Associated documents
Latest versions of the price control financial handbooks for the RIIO Network Operator incorporating changes to the pensions chapter and the implementation of PARCAs (GT only).

  • Published: 26th Oct 2018
  • Decisions
  • 1 Associated documents
This is the GT1 PCFM for the AIP that is planned to take place by the 30 November 2018.

  • Published: 30th Aug 2018
  • Charts and data
  • 1 Associated documents
RIIO-GT1 PCFM published following the decision on modifications to implement PARCA and Fleetwood. Note that this is not the final model for use in AIP 2018.

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