Consultation on our minded-to position on the review of gas transporter agency (Xoserve) costs in RIIO GD1 and T1

Publication date
10th June 2016
Closing date
7th July 2016
Policy areas

We undertook a review of Xoserve’s funding, governance and ownership arrangements to ensure that they would be fit for purpose, and provide the required responsiveness and flexibility in funding, in the context of future industry changes.

In October 2013, after consulting on various options, we decided that a full co-operative governance model should be established. Xoserve will be the central service provider (CSP) to the gas industry. The gas transporters (GTs) will remain its owners, and changes to the way that Xoserve is funded will be required to fully introduce co-operative arrangements and make all users accountable for the CSP. An uncertainty mechanism to allow Ofgem to review Xoserve Costs and determine relevant adjustments to the relevant GT’s level of allowed expenditure in relation to Xoserve Costs was included in RIIO-GD1 and T1 under special condition 3F (gas distribution) and special condition 6D (gas transmission) of the gas transporter licence.

This letter is our consultation on our minded-to decision on the review of Gas Transporter’s Xoserve’s costs for the remainder of RIIO-GD1 and T1 as allowed by the uncertainty mechanism. Following a review of the responses to this consultation, we will publish our final decision by September 2016, which would take effect from 1 April 2017.