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RIIO-2 Open Letter Response

7 September 2017

In this open letter response [ 300 kb] on the future of energy network price controls, we argue Ofgem should

  • Seriously consider models of consumer engagement that could provide detailed scrutiny of energy networks’ business plans;

  • Use greater indexation and tougher incentive benchmarks to ensure that networks earn a fair return on investment that represents good value to consumers;

  • While supporting the alignment of ED1 and T1 in principle, be mindful of practical constraints on this;

  • Review how the IQI and fast-tracking worked in RIIO-1, with the aim of encouraging network companies to submit more efficient costs for outputs;

  • Scrutinise whether the 8-year price control length is really delivering the benefits for consumers that network companies have often argued they do.