National Grid CEO agrees to RIIO Price Controls
Ofgem has agreed its current price controls with National Grid CEO Steve Holliday, who heads up one of the four companies involved in delivering the national services. The new price controls, which focus on quality and innovation, have thus been accepted by the National Grid, after Mr Holliday’s appraisal of Ofgem’s revenue allowances and incentive mechanisms, which he believes will bring about a fair return for investors as well as promoting considerable infrastructure development.
The forthcoming price controls RIIO-T1 and RIIO-GD1 will encompass transition and distribution from the National Grid across all owner and system operator businesses, with a predicted asset value growth of 80% over the course of the next eight years.
Published on: Mar 3, 2016
Transcripts - National Grid CEO agrees to RIIO Price Controls
28 February 2013 National Grid announces agreement of RIIO price controlsNational Grid has agreed all of the UK RIIO price control arrangements proposed by Ofgem. The Boardof National Grid believes that the combination of revenue allowances and incentive mechanismsprovides a good opportunity to earn appropriate returns for investors while delivering essentialinfrastructure investment for the benefit of consumers and the UK economy.The RIIO-T1 and RIIO-GD1 price controls cover all of National Grids transmission and distributionowner and system operator businesses in the UK, with a current regulated asset value in excess of£22bn. Ofgem’s latest forecast predicts this asset value will grow by around 80% over the eight yearsof the price control, which will run from 1 April 2013.As previously stated, the Company is in the latter stages of work to evaluate the long term outlook ofthe Group as a whole, ahead of announcing a new dividend policy for the period starting from 1 April2013. We expect to announce this new policy by, at the latest, the time of our full year results in May2013.Steve Holliday, Chief Executive, said:“I am pleased to confirm agreement of the RIIO price controls for our UK businesses. This is theculmination of a new process that started over three years ago, and represents another opportunity forNational Grid to deliver further shareholder value.These arrangements give our UK businesses their longest ever period of regulatory clarity. Thisenables us to focus on driving efficiency across our operations while building the infrastructure that thecountry needs and at the same time realise the benefits of excellent performance for both customersand investors.” 1
CONTACTSInvestors John Dawson +44 20 7004 3170 +44 7810 831944 (m) George Laskaris +1 718 403 2526 +1 917 375 0989 (m) Andy Mead +44 20 7004 3166 +44 7752 890787 (m) Tom Hull +44 20 7004 3172 +44 7890 534833 (m) Caroline Dawson +44 20 7004 3169 +44 7789 273241 (m)Media Gemma Stokes +44 1926 655272 +44 7974 198333 (m) Chris Mostyn +44 20 7004 3149 +44 7774 827710 (m)Brunswick Tom Burns +44 20 7404 5959CAUTIONARY STATEMENTThis announcement contains certain statements that are neither reported financial results nor other historicalinformation. These statements are forward-looking statements within the meaning of Section 27A of the SecuritiesAct of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Thesestatements include information with respect to National Grid’s financial condition, its results of operations andbusinesses, strategy, plans and objectives. Words such as ‘anticipates’, ‘expects’, should’, ‘intends’, ‘plans’,‘believes’, ‘outlook’, ‘seeks’, ‘estimates’, ‘targets’, ‘may’, ‘will’, ‘continue’, ‘project’ and similar expressions, as wellas statements in the future tense, identify forward-looking statements. These forward-looking statements are notguarantees of National Grid’s future performance and are subject to assumptions, risks and uncertainties thatcould cause actual future results to differ materially from those expressed in or implied by such forward-lookingstatements. Many of these assumptions, risks and uncertainties relate to factors that are beyond National Grid’sability to control or estimate precisely, such as changes in laws or regulations, announcements from anddecisions by governmental bodies or regulators (including the new RIIO approach and electricity market reform inthe UK); breaches of, or changes in, environmental, climate change and health and safety laws or regulations,including breaches arising from the potentially harmful nature of its activities; network failure or interruption, theinability to carry out critical non network operations and damage to infrastructure, due to adverse weatherconditions, including the impact of Hurricane Sandy and other major storms as well as the results of climatechange, or due to unauthorised access to or deliberate breaches of our IT systems or otherwise; performanceagainst regulatory targets and standards and against National Grid’s peers with the aim of delivering stakeholderexpectations regarding costs and efficiency savings, including those related to investment programmes,restructuring and internal transformation projects; and customers and counterparties failing to perform theirobligations to the Company. Other factors that could cause actual results to differ materially from those describedin this announcement include fluctuations in exchange rates, interest rates and commodity price indices;restrictions in National Grid’s borrowing and debt arrangements, funding costs and access to financing; regulatoryrequirements for the Company to maintain financial resources in certain parts of its business and restrictions onsome subsidiaries’ transactions, such as paying dividends, lending or levying charges; inflation; the delayedtiming of recoveries and payments in our regulated businesses; the funding requirements of its pension schemesand other post-retirement benefit schemes; the loss of key personnel or the ability to attract, train or retainqualified personnel and any disputes arising with its employees or the breach of laws or regulations by itsemployees; and incorrect or unforeseen assumptions or conclusions (including financial and tax impacts andother unanticipated effects) relating to business development activity, including assumptions in connection withjoint ventures. The effects of these factors are difficult to predict. For further details regarding these and otherassumptions, risks and uncertainties please read the Business Review section including the ‘Risk factors’ onpages 41 to 43 of National Grid’s latest Annual Report and Accounts. In addition new factors emerge from time totime and National Grid cannot assess the potential impact of any such factor on its activities or the extent to whichany factor, or combination of factors, may cause actual future results to differ materially from those contained inany forward-looking statement. Except as may be required by law or regulation, National Grid undertakes noobligation to update any of its forward-looking statements, which speak only as of the date of this announcement.The content of any website references herein do not form part of this announcement. 2