Ofgem set the price controls for energy transmission and gas distribution from 2013 to 2021. As part of this, provision was made for a mid-period review of the outputs companies have to deliver for customers if there were material changes in Government policy, or changes in the needs of consumers and network users.
In May Ofgem opened a mid-period review into the energy transmission price controls. Ofgem is proposing to reduce National Grid’s spending allowances for its electricity and gas transmission businesses.
Taking into account the additional allowance for National Grid’s system operator role the total reduction in allowances is £185.4 million.
Ofgem is consulting on its proposals and will make a final decision this autumn. Changes to National Grid’s revenue would take effect from April 2018.
The review has not re-opened the price control (for example changing key financial aspects such as the allowed cost of capital).
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
For facts, figures and information about Ofgem’s work, see Energy market facts and figures.
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