Ofgem has launched a mid-period review (MPR) into price controls for National Grid Electricity Transmission and National Grid Gas Transmission to review three specific outputs.
The MPR will look at whether there have been any changes to outputs relating to National Grid Gas Transmission’s Avonmouth pipeline, the number of generation connections National Grid Electricity Transmission has had to undertake, and the increase in National Grid’s system operator role.
Ofgem will not be opening a review for the electricity transmission price controls for SP Transmission and Scottish Hydro Electric Transmission, or into gas distribution as it has not identified any issues that justify an MPR.
Ofgem will consult on proposals for any changes to outputs and associated revenues in the summer, before making a decision in late autumn 2016 for implementation from April 1 2017.
The energy industry was divided over the need for an MPR, with British Gas and Citizen’s Advice calling for one in electricity and gas transmission, and gas distribution, while network companies were concerned an MPR would effectively create two shorter four-year control periods.
Ofgem said it will be inviting views on how the RIIO price control framework is working when it consults on MPR proposals in the summer “to make sure it delivers for consumers in the current controls and make sure we learn any lessons for the next round of price controls.
“We will continue to monitor the performance of the regulated network companies and the drivers of this as part of the annual reporting process to satisfy ourselves that the RIIO framework is working as well as possible,” it added.
Ofgem said alongside the MPR it will be reviewing other areas of concern which were raised in a consultation held by Ofgem over its proposals to hold a review, although some of this work was already in progress.
These include how it holds companies to account for outputs, filling any gaps in the RIIO framework, and improving the operation of some of the incentives.
This work will be undertaken across both the transmission and gas distribution price controls.