Ofgem's Open Letter Consultation on the RIIO-ED2 Price Control closed on the 15th October. What we do know so far is that Ofgem will be tougher on network companies to deliver innovation, reliability and investment at the least cost to consumers.
Reviewing Ofgem's approach to RIIO-GD2 / T2 and ED2 it is clear that consultation and engagement is required to construct well considered outputs and evidence-based business plans which meet Ofgem's objectives.
With these business plans expected to be submitted in early 2020 we turn our focus to the current consultation on the electricity distribution price control (RIIO-ED2).
The electricity distribution network carries electricity from the high voltage transmission network to industrial, commercial, and domestic users. In Great Britain there are fourteen electricity distribution network operators (DNOs), managed by six companies.
Ofgem have stated in their open letter consultation that they believe that in this period consumers should expect to be served by a local grid that:
In their open letter, Ofgem propose that their overarching objective for RIIO-ED2 is to ensure that the DNOs deliver the value for money services that both existing and future consumers need. In recognition of this, we believe that ED2 will be driven by effective consumer engagement to deliver outputs. Alongside this there are three main priorities:
In our experience, Ofgem will be expecting the electricity distribution companies to illustrate a well thought through and transparent business plan which delivers value to the end consumer. As we are in the early stages of consultation the exact focus for the price control is yet to be decided, however, we believe that to support the business planning process companies will need to ensure that they have meaningfully engaged with consumers and stakeholders and are delivering insight in line with Ofgems key objectives and priorities.
Explain Market Research specialises in delivering research to support regulatory business planning. We have worked within the utilities sector for two decades, working in contracted partnerships with several of the UK’s biggest and most respected suppliers and distributors. These relationships have allowed Explain to develop an in-depth understanding of the importance of consumer and stakeholder consultation and research, ensuring we engage with the end user to deliver insights that support and are aligned to business planning.
We will continue to share our experience and best practice, throughout the RIIO-ED2 consultation and business planning process. For further information on how we can support you, please contact Kim Davis.