National Grid PLC NG submits response to RIIO T2 consultation (9537S)
March 15 2019 - 2:01AM
UK Regulatory
TIDMNG.
RNS Number : 9537S
National Grid PLC
15 March 2019
15 March 2019
National Grid Submits Response
to RIIO T2 Consultation
Following our announcement on 18 December, we have now submitted
our response to Ofgem on the sector specific methodology
consultation for RIIO-T2.
The overall framework proposals set out by Ofgem in the sector
specific consultation are a step in the right direction but we are
concerned that as currently set out, the proposals will not bring
about the change consumers need. Our vision is of an energy future
where bills are kept low for consumers, energy is decarbonised,
innovation is encouraged and which together support the growth and
prosperity of the UK economy.
In our response we outline the importance of a framework that
fairly reflects the risk-return balance for consumers and investors
alike. Specifically, we show that rectifying the individual errors
in the current proposal, taking a balanced view of the full suite
of evidence and removing the unjustified 50 basis points
outperformance adjustment results in an allowed return on equity of
5.5% (real RPI basis). We also highlight that incentive based
regulation has driven at least GBP15bn of long term consumer value
in electricity transmission over the last 25 years and encourage
Ofgem to re-embrace the concept of incentivisation to deliver
innovation and efficiency.
The changes we propose are in the long-term interests of
consumers and will better enable the transition to a secure,
resilient, low carbon energy system.
A summary of our response to the consultation is available on
our website here.
Investors and Analysts
+44 (0) 20 7004 3170
(d)
+44 (0) 20 7004 3460
Aarti Singhal (d)
+44 (0) 7989 492 447
Tom Edwards (m)
Media +44 (0) 7960 012356 +44 (0) 7976 962 791
Sean Kemp (m) (m)
CAUTIONARY STATEMENT
This announcement contains certain statements that are neither
reported financial results nor other historical information. These
statements are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These
statements include information with respect to National Grid's (the
Company) financial condition, its results of operations and
businesses, strategy, plans and objectives. Words such as 'aims',
'anticipates', 'expects', 'should', 'intends', 'plans', 'believes',
'outlook', 'seeks', 'estimates', 'targets', 'may', 'will',
'continue', 'project' and similar expressions, as well as
statements in the future tense, identify forward-looking
statements. These forward-looking statements are not guarantees of
National Grid's future performance and are subject to assumptions,
risks and uncertainties that could cause actual future results to
differ materially from those expressed in or implied by such
forward-looking statements. Many of these assumptions, risks and
uncertainties relate to factors that are beyond National Grid's
ability to control, predict or estimate precisely, such as changes
in laws or regulations, including any arising as a result of the
United Kingdom's exit from the European Union, announcements from
and decisions by governmental bodies or regulators, including
proposals relating to new price controls and the separation of the
role of the UK electricity system operator as well as increased
political and economic uncertainty; the timing of construction and
delivery by third parties of new generation projects requiring
connection; breaches of, or changes in, environmental, climate
change and health and safety laws or regulations, including
breaches or other incidents arising from the potentially harmful
nature of its activities; network failure or interruption, the
inability to carry out critical non network operations and damage
to infrastructure, due to adverse weather conditions including the
impact of major storms as well as the results of climate change,
due to counterparties being unable to deliver physical commodities,
or due to the failure of or unauthorised access to or deliberate
breaches of National Grid's IT systems and supporting technology;
performance against regulatory targets and standards and against
National Grid's peers with the aim of delivering stakeholder
expectations regarding costs and efficiency savings, including
those related to investment programmes and internal transformation,
cost efficiency and remediation plans; and customers and
counterparties (including financial institutions) failing to
perform their obligations to the Company. Other factors that could
cause actual results to differ materially from those described in
this announcement include fluctuations in exchange rates, interest
rates and commodity price indices; restrictions and conditions
(including filing requirements) in National Grid's borrowing and
debt arrangements, funding costs and access to financing;
regulatory requirements for the Company to maintain financial
resources in certain parts of its business and restrictions on some
subsidiaries' transactions such as paying dividends, lending or
levying charges; inflation or deflation; the delayed timing of
recoveries and payments in National Grid's regulated businesses and
whether aspects of its activities are contestable; the funding
requirements and performance of National Grid's pension schemes and
other post-retirement benefit schemes; the failure to attract,
train or retain employees with the necessary competencies,
including leadership skills, and any significant disputes arising
with National Grid's employees or the breach of laws or regulations
by its employees; the failure to respond to market developments,
including competition for onshore transmission, the threats and
opportunities presented by emerging technology, development
activities relating to changes in the energy mix and the
integration of distributed energy resources; and the need to grow
the Company's business to deliver its strategy, as well as
incorrect or unforeseen assumptions or conclusions (including
unanticipated costs and liabilities) relating to business
development activity, including assumptions in connection with the
Company's sale of the remaining Cadent stake. For further details
regarding these and other assumptions, risks and uncertainties that
may impact National Grid, please read the Strategic Report section
and the 'Risk factors' on pages 193 to 196 of National Grid's most
recent Annual Report and Accounts, as updated by National Grid's
unaudited half-year financial information for the six months ended
30 September 2018 published on 8 November 2018. In addition, new
factors emerge from time to time and National Grid cannot assess
the potential impact of any such factor on its activities or the
extent to which any factor, or combination of factors, may cause
actual future results to differ materially from those contained in
any forward-looking statement. Except as may be required by law or
regulation, the Company undertakes no obligation to update any of
its forward-looking statements, which speak only as of the date of
this announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCJIMMTMBIBTML
(END) Dow Jones Newswires
March 15, 2019 03:01 ET (07:01 GMT)
National Grid (LSE:NG.)
Historical Stock Chart
From Apr 2024 to May 2024
National Grid (LSE:NG.)
Historical Stock Chart
From May 2023 to May 2024