Consultation on RIIO-ED1 price control reopeners (May 2019)
Consultation
- Upcoming
- Open
- Closed (awaiting decision)
- Closed (with decision)
Publication date
Closing date
Industry sector
Distribution Network
Decision
Introduction
We are consulting on our initial views on the twelve reopener submissions we received during the May 2019 application window. This consultation will run for 28 days, closing at 12pm on Friday 30 August 2019.
We welcome engagement from interested stakeholders during the consultation period. Please contact RIIO-ED1@ofgem.gov.uk if you have any questions about the documents, process, or if you would like to discuss any of the issues raised in our consultation documents before submitting your response.
Overview
The current RIIO price control for electricity distribution (RIIO-ED1) runs from 1 April 2015 to 31 March 2023. For cost categories where there was significant uncertainty about expenditure requirements at the time of setting allowances, the price controls include a type of uncertainty mechanism called a “reopener”. The mechanism allows network companies to propose adjustments to baseline expenditure allowances for these costs when there is more certainty. The reopener mechanism specifies a window in May 2019 during which adjustments to allowances may be proposed for specified uncertain cost categories.
The reopener mechanism also specifies a window in February 2019, during which Scottish and Southern Electricity Networks (SSEN) was able to and did submit a request for an adjustment to its baseline expenditure allowances for Subsea Cables Costs. This request applies to SSEN’s Scottish Hydro Electric Power Distribution plc (SHEPD) licence area. This consultation process for May 2019 reopener submissions is being run separately to the February 2019 process and therefore we are not seeking views on SHEPD’s submission as part of this consultation.
We received submissions from all six electricity distribution network operators (DNOs) during the May 2019 window. We received submissions in the following cost categories:
- High Value Project Costs
- Rail Electrification Costs
- Enhanced Physical Site Security Costs
- Specified Street Works Costs
In June, as part of phase 1 of our consultation process, we published non-confidential versions of DNOs’ reopener submissions, in which we sought early views from stakeholders. We received five responses to this informal consultation, and have published all non-confidential responses we received alongside this formal consultation.
We have now assessed these submissions in line with criteria set out in network company licences and the Price Control Financial Handbook, in which we have taken account of a range of factors, including the need for the proposed expenditure, our assessment of efficient costs, and any allowances that have been previously included in baseline allowances. In this phase 2 of the consultation process, we present our initial views on all submissions. We welcome your views on each submission.
Your Views
We are especially interested in your views on the following questions in respect of each submission:
- Do you have any views on our assessment methodology?
- Do you have any views on the outcome of our assessment?
We ask that you provide your feedback as early as possible. This would allow us to take account of your responses in reaching our final decision. We will consider responses as part of our final determination which we intend to publish in October this year.
Please contact RIIO-ED1@ofgem.gov.uk if you have any questions about the process or any of the submissions.
Update - 6 August 2019: We have amended the Specified Streetwork Costs consultation. We have identified an issue with the volume figures used to calculate the costs that were published in the original minded to consultation. These have now been corrected in the attached document. The amended version includes adjustments to WMID and EMID.
Update - 15 August 2019: We have now published a spreadsheet setting out our quantitative assessment of the Specified Street Works Costs submissions we received during the reopener window in May 2019. As a result of this, we are extending the consultation period for our consultation on the Specified Streetworks Costs reopener. The Specified Street Works Costs reopener consultation will end at 12pm on the 6 September 2019. All of the other reopener consultations will still close on the original date.
Update - 6 September 2019: We are extending the closing date of the Specified Streetsworks Costs reopener to the 10 September 2019 at 12pm.
Respond name
Victoria Lowe