RIIO-T1 Transmission price control review
SHE Transmission plc publications
Delivering on our commitments – SHE Transmission plc's summer 2012 consultation
Our January 2012 update document set out our proposals for 'Keeping the lights on and supporting growth' across the north of Scotland during the RIIO-T1 transmission price control period from 1 April 2013 to 31 March 2021.
Since then, we have been developing the processes and procedures that will allow us to deliver against these proposals and we are pleased to now publish our Summer 2012 consultation document based on the work we have been undertaking during this period.
This document summarises our work to date but we are keen that this is an inclusive process and to ensure it works for all of our customers and stakeholders. We have therefore highlighted a number of areas where we are keen to test our latest thinking to ensure it is appropriate to deliver to you in a meaningful and sustainable way. Please direct responses to Landel Johnston.
You can read more about how we have informed our decisions in our latest documents section.
Background
Scottish Hydro Electric Transmission plc owns and maintains the 5,000km high voltage electricity network of underground cables and overhead lines that serves the northern part of Scotland and connects to central and southern Scotland and the rest of Great Britain. Electricity networks like this provide a physical link between electricity generators and electricity users. SHE Transmission plc's duties and obligations include ensuring we are able to provide an economic and efficient service to generators who wish to connect electricity onto our network.
Because electricity transmission businesses like SHE Transmission plc are natural regional monopolies, they are regulated by Ofgem through a ‘price control’. Amongst other things, this determines the amount of revenue they can earn from network users and the framework for capital investment in developing; maintaining and upgrading the networks.
Transmission price control from 1 April 2013
During 2008-2010, Ofgem undertook a detailed review of the way electricity and gas networks in Great Britain are regulated - the RPI-X@20 review. Ofgem published its decision document in October 2010 to implement a new regulatory framework, known as the RIIO model (revenue = incentives+innovation+outputs) of which the electricity transmission network review will form one of the first under this process and be known as RIIO-T1. These decisions form the basis for determining the transmission price control which is due to begin on 1 April 2013. Visit Ofgem's website for more information about the review.
One of Ofgem’s key decisions is to adopt an outputs-led approach to network regulation. This means regulated companies, such as SHE Transmission plc, will need to define the service levels or outputs they expect to deliver to their customers. The prices they will be allowed to charge for the use of their networks will be based on delivering those service levels or outputs. Companies might face penalties for not meeting the defined standards or secure rewards for exceeding them.
Ofgem published the results of their initial consultation on the strategy for the transmission price control in December 2010. They have followed this up with their decision on strategy document at the end of March 2011. Ofgem published their initial assessment to our Business Plan submission in October 2011, with a detailed annex document.
Ofgem published a letter, RIIO-T1: decision on fast tracking, as an update on the progress SHE Transmission plc has made on 'fast-tracking' on 23 January 2012 confirming their acceptance of our Business Plan as suitable for 'fast-tracking' subject to a consultation on initial proposals which they will issue on 6 February 2012.