The following Energy guidance note provides comprehensive and up to date legal information covering:
This Practice Note summarises the position on the ‘RIIO-2’ Great Britain energy network company price controls due to apply from 2021.
RIIO (Revenues = Incentives + Innovation + Outputs) refers to the methodology through which the Office of Gas and Electricity Markets (Ofgem) determines the prices that Great Britain’s (GB’s) licensed onshore energy network owners and operators can charge for the use of the electricity and gas transmission networks.
These charges are, in the first instance, paid to network companies by licensed suppliers and generators/gas shippers (under the Connection and Use of System Code, the Distribution Connection and Use of System Agreement, and the Uniform Network Code). However, they are ultimately recovered from customers as part of energy supply bills and indeed make up a significant portion of the cost of receiving energy. As a result, ensuring tight and appropriate controls on the levels of charges so as to avoid inappropriate levels of return for network companies, is a political and regulatory imperative.
This note focuses on the next set of RIIO price controls (known as RIIO-2 or RIIO 2) which will begin to apply from 31 March 2021. This Practice Note is updated as the position evolves.
For an introduction to the legal basis of energy network company price control in Great Britain, see Practice Note: The regulation of charging (‘price control’) by Great Britain’s electricity and gas network companies.
Ofgem first developed the RIIO approach in 2010. It was implemented by making amendments to electricity and gas network companies’ licences pursuant to Ofgem’s right to do so under section 11A of the Electricity Act 1989 and section 23 of
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234