OFGEM Ofgem launches RIIO-ED1 consultation

  OFGEM - Ofgem launches RIIO-ED1 consultation

RNS Number : 5023N
28 September 2012

Press Release

28 September 2012


· Successful RIIO price control model will be used to encourage smarter
networks that deliver sustainable energy and value for money

· Proposals aim to improve customer service and network reliability

Ofgem has today published its consultation on the next price control for
Britain's 490,000 miles of electricity distribution network that delivers
power to homes and businesses. The control, known as RIIO-ED1, is designed to
encourage companies to deliver safe, reliable and sustainable services at
value for money to consumers. 

The new price control is proposed to run from 2015 until 2023, during which
time there is expected to be an increased take up of low carbon technologies
including heat pumps, solar panels and small scale renewable generation. This
will require the networks to be flexible and smarter to allow the connection
of these new technologies. Through RIIO, Ofgem's new framework for regulating
network companies, we are proposing a range of incentives, obligations and
targets to ensure that distribution network companies do this in a timely and
cost effective way, using smart solutions where appropriate.

Included in today's consultation is a range of proposals which are aimed at
stimulating increased network reliability and better customer service. These
include proposals for a new target to stimulate improvements for customers who
are 'worst served' in terms of reliability, typically remote rural locations.
Also included are plans, which we have recently consulted on, to ensure
uniform compensation rights and guaranteed standards across the country,
including to Scotland's Highlands and Islands.

Hannah Nixon, Senior Partner for Distribution said: "Today's consultation asks
questions on a number of areas where we are seeking to incentivise
improvements in reliability, customer service, environmental impact and
innovation. This is a price control that puts consumers at the heart of the
companies' plans and we encourage people to get involved and tell us what they
think about our proposals."

The consultation is open until 23 November and there will be a number of
stakeholder events held where people can find out more about and ask
questions. For more information go to www.ofgem.gov.uk or email



Notes to editors

1. The RIIO-ED1 strategy consultation document can be found here:

2. The strategy decision for RIIO-ED1 is due to be published in February
2013. This will then be used by the distribution network operators (DNOs) to
develop their business plans.

          phase           year   month   milestone
                               February  Open letter consultation published
                          2012           (8 weeks consultation)
  Strategy Development         September Strategy Consultation published
                                         (8 weeks consultation)
                               February  Strategy Decision published
                                 July    DNOs submit & publish business plans

  Initial Business Plan   2013           Invitation for comments (4 weeks)
Assessment and fast-track       October  Initial Assessment and fast-track
        decision                         Draft Determination published (8
                                         weeks consultation)
                               February  Fast-track Final Determination
                                 March   Non-fast-track DNOs resubmit &
                                         publish business plans

                          2014           Invitation for comments (4 weeks)
                                 July    Non-fast-track Draft Determination
     Draft and Final                     published (8 weeks consultation)
Determination and launch       November  Non-fast-track Final Determination
                               December  Statutory Consultation (28 days) on
                                         licence modifications
                          2015   April   Wednesday 1^st - new price control
                                         (RIIO-ED1) commences

3. RIIO (Revenue=Incentives+Innovation+Outputs) is Ofgem's new framework for
setting price controls. This new framework incentivises companies to meet
environmental targets and secure energy supplies, while delivering long-term
value for money for consumers. RIIO also puts in place greater incentives and
penalties to stimulate greater efficiency and innovation from companies. RIIO
has been used for the electricity and gas transmission as well as gas
distribution price controls which are due to begin in April 2013.

4. Ofgem is the Office of the Gas and Electricity Markets, which supports the
Gas and Electricity Markets Authority, the regulator of the gas and
electricity industries in Great Britain. The Authority's powers and duties are
largely provided for in statute, principally the Gas Act 1986, the Electricity
Act 1989, the Utilities Act 2000, the Competition Act 1998, the Enterprise Act
2002, the Energy Act 2004 as well as arising from directly effective European
Community legislation.

For further press information contact:

Lisa O'Brien 020 7901 7426

Chris Lock  020 7901 7225

Lydia Fitzpatrick 020 7901 7419

Felicity Beverley  020 7901 3858

Mark Wiltsher  020 7901 7006

Out of hours 07766 511470

                     This information is provided by RNS
           The company news service from the London Stock Exchange


MSCUWVSRUVAKUAR -0- Sep/28/2012 15:00 GMT
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