National Grid cost pass-through request partially allowed

Ofgem decision (10 pages, PDF) to allow the recovery from users of £4.9 million of additional electricity system operator costs in 2005/2006, as a result of income adjustment terms totalling £29.5 million. National Grid is automatically entitled to recover 80 per cent of its additional costs through the 2005/2006 SO incentive scheme and these income adjustment terms only affect recovery of the last 20 per cent.

Ofgem's adjustment is 18 per cent lower than the £35.8 million figure suggested by National Grid and consulted on in August 2006.

For 2006/2007 Ofgem has not set any ex ante allowances and all costs will be passed-through subject to an economy and efficiency test.

For further information or advice please contact Franck Latrémolière.

Filed under BETTA, Electricity, Ofgem, Price controls.

Reckon LLP is an economics consultancy with expertise in data analysis, economic regulation and competition law.

About Reckon