Distribution network operator (DNO) Northern Powergrid has lodged an appeal with the Competition and Markets Authority (CMA) in relation to “two specific errors of fact” in the Gas and Electricity Market Authority’s (GEMA) price control determination.
RIIO-ED2 (Revenue = Incentives + Innovation + Outputs for electricity distribution) sets the output that DNO’s must deliver, as well as the level of investment they are allowed to make, over the specific time period.
Following feedback of the “tough and stretching” determinations published in its June 2022 Draft, Ofgem confirmed the final investment package for DNO’s for the next five years of the RIIO-ED2 (2023 to 2028) last November.
Of all the DNO’s, Northern Powergrid’s allowed baseline total of expenditure over the five year period had the greatest disparity (13.60%) from the Totex (Capital Expenditure + Operational Expenditure) it submitted in its final RIOO-ED2 business plan.
| DNO | Submitted Totex (£m, 2020/21 prices) | Allowed Totex(£m, 2020/21 prices) | Difference |
| Electricity North West | 1,890 | 1,720 | -9.00% |
| Northern Powergrid | 3,232 | 2,792 | -13.60% |
| National Grid Electricity Distribution | 6,893 | 5,977 | -13.30% |
| UK Power Networks | 5,523 | 5,179 | -6.20% |
| SP Energy Networks | 3,397 | 2,951 | -13.10% |
| Scottish and Southern Electricity Networks | 4,241 | 3,589 | -15.40% |
| Total | 25,176 | 22,207 | -11.80% |
“The mistakes mean that the terms of the settlement do not properly reflect GEMA’s intended decision,” the DNO told Current±.
“They need to be corrected so that the company can invest the right amount in the network over the next five years to improve reliability, resilience and the service delivered to customers.”
