Indexation for future OFTO and interconnector licences

Publication date
14th October 2015
Closing date
9th December 2015
Policy areas

We would like to invite interested parties to provide their views regarding indexation for future OFTO and electricity interconnector projects by the date of 9th December.

The purpose of this open letter is to invite views on any potential obstacles to such a change in approach to indexation and whether this should impact on the timing of when a change should be applied (e.g. whether to introduce changes to new projects in 2016 or at a later date). We will take account of those views and potential impacts, such as those on investor appetite, financeability or long-term management, before concluding our approach for future projects.

About current indexation

A number of reviews and assessments from relevant authorities have highlighted that indices other than RPI may better serve consumers and investors alike, by being more accurate and consistent with international best practice.

About this open letter

We aim to understand the impact and implications of changing from RPI to CPI or a more appropriate index on future OFTO projects, and second window interconnector projects receiving a cap and floor.

Next steps

We will review and assess responses to this open letter. We currently anticipate making a decision prior to the next  OFTO tender rounds and interconnector cap and floor application windows, early next year.