On 20th January, Ofgem published a consultation paper setting
out its emerging thinking on its RPI-X@20 project. This review
started at the end of 2008 and considers whether the RPI-X
regulatory framework, which has been in place since privatisation
in 1990, remains appropriate for the regulation of energy networks,
particularly in light of the need for the networks to facilitate
the delivery of a sustainable energy sector.
Ofgem's proposal is that the new regulatory framework would
continue to be an ex-ante price control framework but, rather than
focusing primarily on inputs (i.e. the costs of providing network
services), would be much more focused on the outcomes achieved by
network companies. This outcome-led approach is reflected in the
proposal to require network companies to achieve output targets
relating to reliability, safety, environmental targets, conditions
for connecting to network services, customer satisfaction and
network-related social obligations.
