Chapter 5 Annexes

These are the annexes and supplementary documentation we’ve compiled that support our core RIIO-ED2 Business Plan document.

Annex 5A.1: Non Operational Capex (excluding IT and Telecoms)

This annex provides details on the SPD and SPM ED2 Non Operational Capex forecast. It provides a summary of forecasted expenditure within our Vehicle fleet, Property and the purchase of Small Tools and equipment.

Annex 5A.2: Business Plan Data Tables (BPDTs)

This annex contains the fully populated Business Plan Data tables. The BPDTs provide details of cost and volume data populated within the individual BPDTs that in turn form our ED2 Totex forecast. Additional information is also populated with a variety of Memo and Financial BPDTs. Please note the BPDTs have not been published due to the level of commercially sensitive information they contain.

Annex 5A.3: Cost Assessment

This annex outlines our approach to Cost Assessment, the methods we have used to ensure our business plan is efficient and how the framework has been used to continuously challenge the Totex within our RIIO-ED2 Business Plan.

This annex has not been published due to the level of commercially sensitive information.

Annex 5A.4: Indirects Costs

This annex provides details on the SPD and SPM ED2 Indirects forecast. It provides a summary of forecasted expenditure within our Closely associated indirects and Business support functions.

Annex 5A.5: Unit Cost Manual

This annex sets out our Unit Cost Manual. These costs have been used to build up our detailed engineering plan. This annex hasn't been published due to the level of commercially sensitive information this contains.

Annex 5A.6 Access SCR

As per Ofgem’s Final RIIO-ED2 Business plan guidance we have developed this annex to detail how we have assessed the impact of Ofgem's Access SCR minded-to proposals. As requested by Ofgem, Access SCR is not contained within our baseline expenditure for RIIO-ED2 as a range of impact assessments has been developed which are contained within this annex.

Annex 5B.1: Uncertainty Mechanisms

This annex sets out the main areas of uncertainty that we must manage as a DNO and provides an overview of how we will manage these using Uncertainty Mechanisms (UMs) where appropriate. Please note this annex has been redacted due to commercially sensitive information.

Annex 5C.1: BPI Stage 1: Minimum Requirements

This is Ofgem's Minimum Requirements Index Sheet which has been populated to detail where material related to Ofgem's Business Plan Incentive can be found within our business plan submission.

Annex 5C.2: BPI Stage 2: CVPs

This annex presents our Consumer Value Propositions (CVPs). We describe our stakeholder-driven approach to CVP development, share a detailed overview of each proposal, outline the reasons that make these valid CVPs and present the costs and estimated benefits tied to each of them. Please note this annex has been redacted due to commercially sensitive information.

Annex 5C.4: Ofgem Summary Table for Outputs, UMs and CVPs

As per Ofgem’s Final RIIO-ED2 Business plan guidance we have developed this annex to detail how we have assessed the impact of Ofgem's Access SCR minded-to proposals. As requested by Ofgem, Access SCR is not contained within our baseline expenditure for RIIO-ED2 as a range of impact assessments has been developed which are contained within this annex.

Annex 5C.5: Output Delivery Incentives

This annex sets out the outputs within our business plan that are classified as an Output Delivery Incentives (ODIs). It gives a brief explanation of what ODIs are and why they are used, before providing details of our bespoke ODI proposals and an overview of the ODIs common to all DNOs. Please note this annex has been redacted due to commercially sensitive information.

Annex 5C.6: Price Control Deliverables

This annex sets out the outputs within our business plan that are being proposed as a Price Control Deliverable (PCD). It gives a brief explanation of what PCDs are and why they are used, before providing details of our bespoke PCD proposal and an overview of the PCDs common to all DNOs. Please note this annex has been redacted due to commercially sensitive information.

Annex 5C.7: Use it or Lose it Allowance and Allowances with clawback

This annex sets out our approach to existing common Use-it or Lose-It (UIOLI) funding mechanisms within the RIIO-ED2 framework and our proposals for bespoke UIOLI funding and allowances with clawback mechanisms. Please note this annex has been redacted due to commercially sensitive information.

Annex 5D.1: Finance

Our Finance Annex explores in more detail our approached to financing our plan. Please note this annex has been redacted as it contains commercially sensitive information.

Annex 5D.2: Cost of Capital

We commissioned NERA Economic Consulting (NERA) to estimate the cost of equity and to assess Ofgem’s proposed cost of debt indexation mechanism, including setting out estimates of the additional costs of borrowing and infrequent issuer premium, for the RIIO-ED2 price control period.

Annex 5D.3: Cost of Equity

As part of wider RIIO-2 ENA agreements, we jointly commissioned Oxera to estimate the cost of equity for the RIIO-ED2 price control period.

Annex 5D.4: Real Price Effects

We commissioned NERA Economic Consulting (NERA) to advise on the appropriate treatment of real input price inflation, known widely as Real Price Effects (RPEs) over the RIIO-ED2 control period from 2023/24 to 2027/28. Please note we are obliged by our consultants to redact their RPE report to protect commercially sensitive information.

Annex 5D.5: Ongoing Efficiency

We commissioned NERA Economic Consulting (NERA) to advise on the appropriate treatment of ongoing productivity improvement, known widely as Ongoing Efficiency over the RIIO-ED2 control period from 2023/24 to 2027/28.

Annex 5D.6: Risk Modelling for RIIO-ED2

We have worked with NERA to develop a financeability risk model, based on Ofgem’s Price Control Financial Model. This paper sets out the methodology that underpins our approach to modelling our approach to financability risk.

Annex 5D.7: Financial Model

Annex 5.7D contains the Ofgem Price Control Financial Models for SP Distribution and SP Manweb. These have not been published due to the level of commercially sensitive information contained within.

Annex 5D.8: Customer Bills

We have provided additional information to help explain how customer bills are calculated.

 

Footer

Hi! I'm the SP Energy Networks System Agent, can I help you?

Avatar