UK energy networks appeal against Ofgem’s price control

The appeals largely focus on the allowed return on investment and the way Ofgem calculated the costs the companies would spend on maintaining and investing in their networks over the next five years

Nine energy network companies are seeking permission from the Competition and Markets Authority (CMA) to appeal against Ofgem’s price control.

They are appealing against changes to the electricity and gas transmission and gas distribution licences, which set out how much energy companies can charge their customers – the result of the RIIO-2 price control decision issued by Ofgem in December 2020 for the period between 1st April 2021 to 31st March 2026.

The appeals largely focus on the allowed return on investment and the way Ofgem calculated the costs the companies would spend on maintaining and investing in their networks over the next five years.

The regulator’s decision means returns will be reduced for the owners of electricity and gas infrastructure in Britain by almost 40%.

The nine firms seeking permission to appeal the price control are Cadent Gas, National Grid Electricity Transmission, National Gas Grid, Northern Gas Networks, Southern Gas Networks, Scotland Gas Networks, Scottish Hydro Electric Transmission, SP Transmission and Wales & West Utilities.

Rob McDonald, Managing Director of SSEN Transmission said: “Our appeal raises technical but very important issues that we are asking the CMA to correct. In the meantime, we can start to deliver against our stakeholder-led business plan and build our network for net zero, supporting government climate change targets and the green recovery from the coronavirus pandemic.

“We would like to thank Ofgem for its constructive engagement following publication of its Draft Determinations and while it is regrettable we have been unable to reach agreement on all aspects of the final price control settlement, we will continue to work constructively with Ofgem and all stakeholders as the CMA considers the merits of our appeal.”

The CMA has 14 working days to decide whether to grant these network companies permission to appeal, however, it can be extended to 20 days if the competition watchdog needs to consider any submission from Ofgem regarding the applications for permission to appeal.

If permission is granted, the CMA will have six months to come to a final view on the appeals.

If you enjoyed this story you can sign up to our weekly email for Energy Live News – and if you’re interested in hearing more about the journey to net zero by 2050, you can also sign up to the future Net Zero newsletter. 

Latest Podcast