Ofgem set to turn down £247m of funding requests

Ofgem set to turn down £247m of funding requests

Ofgem has proposed to refuse approximately £247 million of funding requests from energy networks.

The energy regulator is currently consulting on requests by several energy network companies for adjustments in funding under the RIIO-ED1 price control, which runs from 2015-2023.

Network companies have submitted 12 funding requests with a total value of £322m. In certain circumstances, network companies can apply for additional funding to cover significant and additional costs for certain activities which had not been forecast when the price controls were set.

The energy regulator has proposed not to approve the highest value funding request - £70m sought by Scottish Power Energy Networks (SPEN) for cable repairs - as it considers that the level of investment requested is not justified. It also proposes not to accept a £42m request from SPEN for work to increase network capacity in anticipation of electric vehicle uptake.

Ofgem is considering proposals to allow a total of £25m to fund street works by three network companies - Electricity North West (ENWL), SPEN and Western Power Distribution (WPD).

In a statement the energy regulator said it was "not minded" to approve approximately £90m in other street works funding requests.

Among other submissions, Ofgem proposes to allow an additional £16m in funding to Scottish and Southern Energy Networks (SSEN) for diversions required to facilitate the electrification of the Great Western Railway line. It also proposing to accept a £30m request from SSEN for cable replacement at Pentland Firth East, subject to strict conditions.

Full details of all funding requests and Ofgem's proposed decisions are in its consultation document. The consultation will close on 30 August 2019 with final decisions set to be published in October 2019.

DISCUSSION

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Ofgem is consulting on requests by network companies for adjustments to funding under the current price controls.

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Ofgem has turned down two applications by SP Energy Networks for a total of £36.8 million of funding through the Innovation Roll-out Mechanism (IRM).

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Energy regulator Ofgem has confirmed that network companies can apply for additional allowances to cover extra costs in their price controls, which had not been forecast when they were agreed.