RIIO Accounts way forward and alternative approach
Correspondence and other
Publication date
Industry sector
- Distribution Network
- Transmission Network
We want to see a step change in the how financial performance under our RIIO price controls is reported as we think stakeholders need more transparent and relevant regulatory accounting information. We no longer think this is best achieved, for the remainder of RIIO-1, via full audited RIIO Accounts. Instead we propose to require the network operators (NWOs) to report more targeted detailed financial information on their RIIO performance. This information would be made publically available and we would distil the key additional information into our annual reports so that there is consistent reporting across the sector.
We think this approach is more proportionate and would make the information more accessible and understandable than publishing full RIIO Accounts. We reached this view taking into account the responses to our RIIO Accounts consultation and our continued engagement with Citizens Advice, the investor community and the NWOs. We think that the new approach will best deliver reporting that will be integral to how current and future price controls are monitored and evaluated.
In particular, we plan for this additional reporting to provide insight into the impacts of each NWO's level of gearing, its cost of debt, and actual tax payments on its returns under the price controls which current reporting does not easily allow. It will also provide information that will allow stakeholders to reconcile the reported financial data with statutory accounts, which we think, is important for the investor community.