Ofgem decides against mid-period review for networks price control
Ofgem has decided against a mid-term review of RIIO ED1, largely through concern over its effect on the cost of finance for the DNOs. Ofgem cites the voluntary return of allowances by the DNOs as evidence that RIIO is working but in truth, it shows how badly it is working. After just a few years RIIO ED1 (and ET1) spend plans have gone seriously off track and Ofgem is replying on network companies acting outside of RIIO regulation to avoid a crisis. With the consultation on RIIO 2 closing this week, it is clear that Ofgem needs to listen to all of industry to put in place regulations that ensure the network companies can plan their investment strategy in the face of an unpredictable future and expect to be rewarded for good business performance, not just changes to forecasts.
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