National Grid accepts Ofgem price controls
MIDLAND-based power utility National Grid has agreed all of the price control arrangements proposed by industry watchdog Ofgem.
In a statement, the company said: “The board of National Grid believes that the combination of revenue allowances and incentive mechanisms provides a good opportunity to earn appropriate returns for investors while delivering essential infrastructure investment for the benefit of consumers and the UK economy.”
The price controls – RIIO-T1 and RIIO-GD1 – cover all of National Grid’s transmission and distribution owner and system operator businesses in the UK, with a current regulated asset value in excess of £22bn.
Ofgem’s latest forecast predicts this asset value will grow by around 80% over the eight years of the price control, which will run from April 1, 2013.
The utility said it was in the latter stages of work to evaluate the long term outlook of the group as a whole, ahead of announcing a new dividend policy for the period starting from April 1, 2013.
It expects to announce this new policy by, at the latest, the time of its full year results announcements in May.
Steve Holliday, chief executive, National Grid, said: “I am pleased to confirm agreement of the RIIO price controls for our UK businesses. This is the culmination of a new process that started over three years ago, and represents another opportunity for National Grid to deliver further shareholder value.
“These arrangements give our UK businesses their longest ever period of regulatory clarity. This enables us to focus on driving efficiency across our operations while building the infrastructure that the country needs and at the same time realise the benefits of excellent performance for both customers and investors.”
