Consultation on a potential RIIO-T1 and GD1 mid-period review

Publication date
12th November 2015
Closing date
12th January 2016
Policy areas
Status

The RIIO-T1 and GD1 price controls set the outputs that the transmission and gas distribution companies must deliver for the period from 1 April 2013 to 31 March 2021 and their allowed revenues for that period. RIIO Final Proposals included provision for a potential mid-period review (MPR) during the eight year price control period with scope driven by:

  1. changes to outputs that can be justified by clear changes in government policy; and
  2. the introduction of new outputs that are needed to meet the needs of consumers and other network users.

Any MPR will identify potential changes to existing outputs that transmission and gas distribution companies are expected to deliver or whether any new outputs are required. Any MPR would not represent an opportunity to re-open the RIIO-T1 and GD1 price controls, e.g. it would not change the key financial parameters such as the cost of capital.

We are consulting on whether there is a need to initiate an MPR in Electricity Transmission and Gas Transmission, and Gas Distribution. We present the potential issues that we have identified and our initial views on what should be taken forward under an MPR.

Our initial view is that there may be some issues in RIIO-T1 that could be addressed through an MPR. We have not identified any material issues for RIIO-GD1. We have also identified some areas of policy we think would benefit from further clarifications so as to avoid any potential uncertainty remaining until the end of the price control period. Based on feedback from stakeholders we will decide whether, how and when to take any such issues forward.

We are asking for stakeholder feedback on our initial views.

After this consultation, we will decide in spring 2016 on whether to initiate an MPR for each price control. If an MPR is initiated, it will start by examining the specific issues in more detail and any policy proposals would be set out during summer 2016 for a decision in late autumn 2016. Any associated licence changes would need to be in place by 1 April 2017.