CEPA's review of the regulatory framework and network companies' performance in the UK's gas and electricity markets

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Client Ofgem
Dates Mar - 2018
Sector(s)Energy
Service(s)Regulation & Competition

CEPA has been advising Ofgem, the UK energy regulator and has delivered two key reports (published today) which Ofgem considered while developing its high profile proposals for the next regulatory review. CEPA's reports included:

 

  • How effective the price control framework has been at achieving its intended objectives – what worked well previously and what lessons can be learned for the next price controls. In particular, CEPA assessed whether the incentives and mechanisms used by Ofgem have had the desired effect on energy network companies’ performance.
  • Approach to estimating the cost of capital to be applied for Ofgem’s upcoming price controls. CEPA assessed the returns that energy network investors are likely to require, taking into account recent evidence, and have recommended ranges for each cost of capital parameter for Ofgem to consider.