Ofgem consults on revised regulatory framework documents for NESO

Article summary

Ofgem has launched a consultation, seeking views on its revised Licence Expectations and Performance Arrangements Governance documents, which support the implementation of the National Energy System Operator (NESO)’s regulatory framework for the RIIO-2 Business Plan 3 (BP3) period, covering 1 April 2025 to 31 March 2026. The revised Licence Expectations Document, which replaces the 'Roles Guidance' document, focuses solely on licence expectations, excluding incentives expectations, and introduces structural changes and updated minimum expectations to reflect changes in some of NESO’s activities. The updates to the Performance Arrangements Governance document reflect Ofgem’s decision to modify NESO’s performance incentives framework. Key changes include revised incentives timelines and processes, reflecting a shift to a one-year assessment period for BP3, updated evaluation guidance, and an updated reporting framework for NESO to align with the new incentives framework. The consultation closes on 5 March 2025.