Statement on Ofgem RIIO2 sectoral consultation

Scottish and Southern Electricity Networks Transmission (SSEN) notes today's publication by Ofgem of its sector specific RIIO2 consultation, which sets out options for the future regulatory framework for electricity transmission.  

SSEN believes that the key test of any sustainable regulatory framework is whether it strikes the right balance between driving efficiency and affordability and maintaining a stable investment climate that supports critical network upgrades, innovation and further decarbonisation of the energy system. It is on this basis that SSEN will assess the merits of any proposed changes to the RIIO framework.

SSEN is therefore disappointed in the proposed Cost of Equity range which it believes runs contrary to independent analysis provided to Ofgem on the level of risk inherent in the delivery of critical electricity transmission infrastructure. 

SSEN will now review Ofgem’s package of proposals in further detail before responding to the consultation and looks forward to regular, constructive and open dialogue with the regulator as it further develops its plans for RIIO-T2.

Progress in SSEN Transmission

SSEN has made substantive progress in preparing for the RIIO-T2 price control, which starts in 2021, including the continued development of its business plan ahead of final submission in December 2019.  As part of this process, SSEN has undertaken extensive engagement and consultation with key stakeholders to ensure it develops a credible and evidence-based business plan that meets the needs of its customers and wider society, while also providing a fair return to investors.  This includes the ongoing engagement with SSEN’s independent RIIO-T2 User Group, which has already met on four occasions.