Ofgem consults on electricity distribution funding requests

2 Aug 2019 03:13 PM

Ofgem is consulting on requests by several energy network companies for adjustments in funding under the RIIO-ED1 price control, which runs from 2015-2023.

In certain circumstances, network companies can apply for additional funding to cover significant and additional costs for certain activities which had not been forecast when the price controls were set.* 

Ofgem is consulting on proposals to allow a total of £25 million to fund street works by three network companies – Electricity North West (ENWL), Scottish Power Energy Networks (SPEN) and Western Power Distribution (WPD). We are minded not to approve approximately £90 million in other street works funding requests.

Among other submissions, Ofgem proposes to allow an additional £16 million in funding to Scottish and Southern Energy Networks (SSEN) for diversions required to facilitate the electrification of the Great Western Railway line. We are also proposing to accept a £30 million request from SSEN for cable replacement at Pentland Firth East that will be subject to strict conditions. 

Ofgem proposes not to approve the highest value funding request – £70 million sought by SPEN for cable repairs – as we consider that the level of investment requested was not justified.  We also propose not to accept a £42 million request from SPEN for work to increase network capacity in anticipation of electric vehicle uptake .

Full details of all funding requests and Ofgem’s proposed decisions are in our consultation document. The consultation will close on 30 August 2019 and we propose to publish our final decisions in October 2019.

Notes

Ofgem has been consulting on a new set of price controls, called RIIO-2, which will first come into effect in 2021 when the transmission and gas distribution price controls of RIIO-1 have expired.

More information about the price controls and energy networks

Further information

For media, contact:

Tim Webb 0207 901 7179

Media out of hours mobile: 07766 511470 (media calls only)

For investors, contact:

John Bolitho - 0207 901 7114

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