Decision on our review of gas transporter agency (Xoserve) costs in RIIO GD1 and T1

Publication date
23rd September 2016
Information types
Policy areas

We undertook a review of Xoserve’s funding, governance and ownership (FGO) 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.

An uncertainty mechanism to allow Ofgem to review Xoserve Costs and determine relevant adjustments to the relevant Gas Transporter’s (GTs) 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. In June 2016 we issued a consultation on our minded-to decision on the review of GTs Xoserve’s costs for the remainder of RIIO-GD1 and T1 as allowed by the uncertainty mechanism.

This letter sets out our decision following a consultation we ran on our minded to decision from 10 June to 7 July 2016.

The arrangements set out in our decision will take effect from 1 April 2017, which is when all the changes to Xoserve’s funding and governance are expected to go live.