SSEN Transmission, the SSE subsidiary which owns the electricity transmission network in the north of Scotland, has confirmed that it intends to appeal certain elements of Ofgem’s RIIO-T2 price control settlement to the Competition and Markets Authority (CMA).
“This follows the publication in December of Ofgem’s Final Determinations for the RIIO-T2 period, which will operate from 1 April 2021 to 31 March 2026, and Ofgem’s subsequent consultation on associated licence condition changes,” said SSEN Transmission.
SSEN Transmission MD Rob McDonald said: “Our appeal raises technical but very important issues that we are asking the CMA to correct.
“In the meantime, we can start to deliver against our stakeholder-led business plan and build our network for net zero, supporting government climate change targets and the green recovery from the coronavirus pandemic.
“We would like to thank Ofgem for its constructive engagement following publication of its Draft Determinations, and while it is regrettable we have been unable to reach agreement on all aspects of the final price control settlement, we will continue to work constructively with Ofgem and all stakeholders as the CMA considers the merits of our appeal.”
SSEN said its appeal is focussed on areas where Ofgem’s decision “does not reflect the robust evidence provided throughout the price control process, alongside material errors in the decision.”
SSEN said these are:
· Cost of Equity, which SSEN Transmission remains disappointed “does not reflect market conditions and the robust evidence provided throughout the price control process.”
· Outperformance wedge “which goes against established regulatory practice by assuming, rather than incentivising, outperformance.”
· New exposure to transmission charges “which unfairly expose Transmission Owners to any under recovery of the NGESO’s own revenue from the market (i.e. to Transmission Network Use of System charges that the NGESO is responsible to recover from users of the transmission system).”
· Loss of appeals right for additional TOTEX released through Uncertainty Mechanisms and TOTEX adjustments made following an outputs assessment “which goes against established regulatory practice, creating unacceptable risk and precedent for future price controls.”