Update on UK Electricity Transmission Allowances

28 March 2017

Update on UK Electricity Transmission Allowances

Through the ongoing reviews of UK Electricity Transmission's investment plans, National Grid has concluded that some investments are no longer needed in this price control. As a result, National Grid has volunteered a deferral of £480m of RIIO T1 allowances. We believe that such a deferral would enable better alignment of the funding (allowances) with the likely timing of spend and help to lower customer bills in the near-term. The need for these deferred investments in the future and the associated level of funding required will form part of RIIO-T2 discussions.

John Pettigrew, Chief Executive Officer said, "We want to play an active role alongside Ofgem in addressing the broader issue of energy affordability in the UK, and we are pleased to have identified this opportunity to help to lower customer bills in the near-term. We continue to expect UK Electricity Transmission to deliver strong outperformance above the base return under RIIO T1."

National Grid has discussed its proposal with Ofgem and expects the change to be enacted through the November 2017 Ofgem annual iteration process. This will lead to lower Electricity Transmission revenues in RIIO T1, of approximately £100m in total, phased across fiscal years 2019/20 and 2020/21.

Notes to Editors:

All financial figures above are quoted in 2009/10 prices, as per the regulatory Price Control Framework Model (PCFM).

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