Ofgem publishes 2022 Annual Iteration Process for Gas Transmission, Electricity Transmission and Electricity System Operator price controls
Ofgem yesterday published the results of the 2022 Annual Iteration Process (AIP) for Gas Transmission (GT2), Electricity Transmission (ET2) and the Electricity System Operator (ESO) network companies under its network price controls.
As part of the ‘Revenue = Incentives + Innovation + Outputs’ (RIIO) price controls for network companies, Ofgem makes annual adjustments to the revenue that it allows the energy network companies to collect through the AIP.
The AIP updates allowed revenues for the next regulatory year (April 2023 - March 2024) based on the submission of actual expenditure and performance data for the regulatory year ending in March 2022 and updated forecasts for the remainder of the price control period.
For GT2, ET2 and ESO, this year’s AIP has increased the allowed revenue that companies will collect relative to the values published at the last AIP123by approximately £1,145 million, £544 million and £119 million in nominal prices for GT2, ET2 and the ESO price controls, respectively. This is driven by:
- Gas prices – forecast gas prices have increased significantly over the past year, which results in an increase in costs and therefore revenues.
- Inflation – higher actual and forecast inflation rates resulting in higher allowed revenue.
- Increased returns – An increase in the inputs used to calculate the cost of debt and equity has resulted in a higher cost of capital allowance.
- Allowed expenditure – networks are generally forecasting more expenditure and higher allowances than the amounts assumed at the start of the price controls.
If you are a member of the media and have an enquiry, please email email@example.com or phone 020 3263 9996 and the media team will get back to you.
Original article link: https://www.ofgem.gov.uk/publications/ofgem-publishes-2022-annual-iteration-process-gas-transmission-electricity-transmission-and-electricity-system-operator-price-controls
Latest News from
Driving Net Zero: how Ofgem is creating an energy network for the future23/03/2023 12:15:00
Blog posted by: Akshay Kaul, Interim Director of Infrastructure and Security of Supply, 22 March 2023.
Ofgem launches national evidence-call on prepayment meters13/03/2023 15:15:15
Ofgem and Citizens Advice are launching a national evidence-call to ask energy customers to share their experiences of moving to a prepayment meter (PPM).
Ofgem sets out proposals to transform local energy systems and create a new energy flexibility marketplace02/03/2023 16:15:00
Ofgem yesterday consulted on the next steps in establishing a more decentralised, decarbonised and dynamic energy system in Great Britain.
Ofgem statement on British Gas prepayment meter installations02/02/2023 14:25:00
An Ofgem spokesperson’s statement on British Gas prepayment meter installations
Jonathan Brearley's speech at the Institute for Government24/01/2023 12:15:00
Jonathan Brearley's speech at the Institute for Government
25,000 Utilita Energy customers to receive compensation after Ofgem uncovers Additional Support Credit failure14/12/2022 14:15:00
Utilita Energy (‘Utilita’) has agreed to pay out £830,000, after a robust assessment by regulator Ofgem suggested the supplier was not taking individual circumstances into consideration when deciding whether or not to provide additional support credits needed for customers topping up prepayment meters.
Ofgem statement on the Sheffield gas supply incident12/12/2022 13:15:00
In these freezing temperatures we recognise this is an extremely difficult situation for the 340 consumers in Sheffield who have now been without gas supply for a week (as of 0900 on 10 December).
Ofgem publishes 2022 Annual Iteration Process for Gas Distribution network price controls30/11/2022 16:25:00
Ofgem has today published the results of the 2022 Annual Iteration Process (AIP) for Gas Distribution (GD2) energy network companies under its network price controls.
Ofgem confirms local electricity networks price control for 2023 to 202830/11/2022 15:20:00
Ofgem has today (Wednesday 30 November 2022) confirmed a five-year investment package for the electricity distribution network companies to help deliver cheaper, cleaner, more reliable local grids at no extra cost to consumers.