Ofgem has established an independent panel of experts to challenge network companies’ business plans for RIIO-2.
With the regulator putting the finishing touches to its framework for RIIO-2, the next set of price controls due to come into force for electricity networks in 2023, each network company is expected to submit a final business plan outlining their investment decisions and rationale in December next year.
And to help scrutinise those plans and contribute towards final decisions over spending allowances, Ofgem has congregated a panel of technical, regulatory, commercial and consumer protection experts.
The panel of 13 is to be tasked with challenging each network company on how consumer needs and views are being taken into account during the development of their respective business plan, before producing an independent report for Ofgem.
In addition, the panel will be asked to raise questions on each business plan, to be put towards the network companies when Ofgem holds open hearings on business plans in spring 2020.
Roger Witcomb is to chair the panel, whose members include;
- Roger Witcomb – Former Competition and Markets Authority chair
- Clare Potter – Competition Appeal Tribunal member and former chief legal adviser to the Competition Commission
- Bob Hull – Ex-Ofgem managing director
- Helen Parker – former deputy chief executive at consumer organisation Which?
- Rosamund Blomfield-Smith – experienced non-executive director and Ofcom advisory group chair
- Jo-Jo Hubbard – Co-founder of Electron
- Goran Strbac – Energy systems professor at Imperial College London
- Ulrich Kaltenbronn – Economic regulation expert and NHS Improvement adviser
- James Richardson – Chief economist at the National Infrastructure Commission
- Sharon Darcy – Director at Sustainability First and member of the UK regulators Network Expert Panel
- Judith Ward – Sustainability First associate and ex-National Grid group head of public affairs
- Alan Bryce – Former senior executive at SP Energy Networks, Northern Ireland Electricity Networks and Scottish Power
- Stew Horne – Citizens Advice’s energy networks and systems team lead
Jonathan Brearley, executive director for systems and networks at Ofgem, said that consumers deserve “robust” and cost-effective business plans from the country’s network operators.
“The advice of the challenge panel will help us assess whether the plans deliver the services that customers expect from the networks in the next decade.”
While most network companies have begun consulting on their plans for RIIO-2, they are still eagerly awaiting a final decision from Ofgem regarding the crucial, yet highly controversial, cost of equity range, a factor which will ultimately dictate the level of returns shareholders and investors in network companies can expect.
In March this year Ofgem proposed capping the cost of equity range to between 3 – 5%, a rate designed to save consumers some £5 billion over the course of five years but one that prompted significant concerns from network operators over their ability to raise finance.
In July Ofgem published a progress update, but deferred a final decision on the cost of equity range until December.