Page 29 - Gi flipbook_May 2019

WHAT IS THE RIIO-2 PRICE CONTROL?
RIIO-2 WILL BE the next
price controls for the network
companies running the gas and
electricity transmission and
distribution networks.
RIIO (Revenue = Incentives +
Innovation + Outputs) is designed
to encourage network companies to:
Put stakeholders at the heart of
their decision-making process.
Invest efficiently to ensure
continued safe and reliable
services.
Innovate to reduce network costs
for current and future consumers.
Play a full role in delivering a
low carbon economy and wider
environmental objectives.

WHEN WILL THE CURRENT PRICE
CONTROLS END?

EACH OF THE CURRENT price
controls are set to run for an eight-
year period. The current price
controls for gas and electricity
transmission (RIIO-T1) and gas
distribution (RIIO-GD1) networks
will end on 31 March 2021. And
the electricity distribution price
control (RIIO-ED1) will end on
31 March 2023. Once they end,
Ofgem will need to put new
controls in place: RIIO-2. In
setting the next price controls,
Ofgem says it wants to learn from
its experience to date and ensure
that networks can deliver the
network services that consumers
will require in the future.

WHAT WILL HAPPEN WHEN?
IN MARCH LAST YEAR, Ofgem
launched its consultation on
the RIIO-2 Framework Review.
This stage marked the beginning
of the consultation process for
setting the next price controls. It
includes a review of the overall
RIIO framework so far and will
also assess if the regulator needs to
make any changes. In an open letter
from July 2017, Ofgem set out the
milestones during the review:
Summer 2018: framework finalised
to set the next price controls.
Summer to autumn 2019:
network companies asked to
submit their business plans.
By the end of 2020: Ofgem to
publish its final view on the price
control allowances.

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RIIOResponse.indd 2 18/04/2019 09:49