The Policy and Economics team are responsible for ensuring that the revenue we are allowed to recover from customers through their bills is legitimate (i.e. no more and no less than what is needed) to deliver the services they need and expect. We also have to balance this with the need to provide a fair return for our investors and allow them to invest in our assets to secure the long-term resilience of the transmission system in Central and South of Scotland.

Given RIIO involves setting Revenue using Incentives to deliver Innovation and Outputs, we must also ensure that appropriate incentives are implemented in RIIO-2 to deliver further benefits to consumers. This includes placing a focus on what is required in RIIO-2 to deliver an environmentally sustainable network. It is important to ensure these incentives reflect our stakeholder and customer priorities and we are continuing to inform our incentives proposals based on the feedback we hear from you. For example, from our engagement with you so far, we know that you want us to fully contribute to the low carbon energy transition and deliver an environmentally sustainable network.

As we move into the RIIO-T2 period, we are working with stakeholders to achieve the right balance of risk and return. This means looking at the cost associated with running our business to ensure it remains fair as well as exploring how to best use the price controls set by Ofgem to respond to a variety of future energy scenarios and respond to change, including where the future energy system turns out differently to what is expected.  We also work hard to minimise the financial risks for those who invest in our networks, particularly those types of changes in the energy sector which are outside of our control. Environmental considerations are of course another fundamental part of the investment decisions within our business plan. This is especially the case given network equipment and infrastructure tends to have a very long life span and so the decisions we make now can have an effect for decades to come.  

Stephanie Anderson

RIIO-T2 Policy and Economics Manager