RIIO-ET1 Price Control Financial Model - Summary of recent modifications
Guidance
Publication date
Industry sector
Transmission Network
The summary of modifications to the ET1 Price Control Financial model (PCFM) following the Annual Iteration Process (AIP) in November 2013 are listed below:
Summary of modifications
On 15 September 2014, the Authority modified the ET1 PCFM by:
- amending the annual spread of the Legacy Allowed Revenue (LAR) calculation, which was hard coded, to i) spread the initial legacy revenue dynamically once the cost of debt has been updated; and ii) correct the Weighted Average Cost of Capital (WACC) used to spread legacy revenue;
- renaming SHETL to SHE-Transmission; and
- enabling National Grid Electricity Transmission Plc (NGET) to recover costs for activities it undertakes as the Electricity Market Reform (EMR) Delivery Body, through the new uncertainty mechanism SOEMRES.
On 8 September 2015, the Authority modified the ET1 PCFM by:
- updating National Grid Electricity Transmission plc’s opening levels of allowed expenditure in relation to Enhanced Security Costs by adding £12.6m of SO Data centre capex, so that the values contained in the PCFM are consistent with the Authority’s final proposals for the RIIO-ET1 price control.
- providing for different Tax Trigger Type B event values to be entered for each of the licensees;
- applying appropriate labels to rows relating to Tax Trigger inputs for Scottish Hydro Electric Transmission plc; and
- ensuring that allowed expenditure values for National Grid Electricity Transmission plc relating to the Electricity Market Reform Enduring Solution are correctly allocated for tax allowance calculations.