Our RIIO (Revenue = Incentives + Innovation + Outputs) price control framework gives a greater focus on outputs and associated secondary deliverables. Secondary deliverables are leading indicators which enable us to monitor companies’ long-term performance. The Network Output Measures (in particular the network assets condition measure, the network risk measure and the Network Replacement Outputs) help to quantify the impact of the companies’ network expenditure.
Electricity transmission licences require Great Britain’s onshore electricity transmission network owners (TOs) to have a Network Output Measures Methodology (“NOMs Methodology”) that explains how we can quantify the impact of the actions taken and expenditure incurred by the companies on their networks, and enables Ofgem and stakeholders to see what the companies have delivered and what to expect in return for future investments.
In February 2016 the electricity transmission licensees submitted a NOMs Common Methodology. This notice sets out the intention of the Authority to direct that the licensees make modifications to this methodology and submit a revised version by December 2016.