National Grid PLC (LON:NG.) has said it cannot accept Ofgem's proposed regulations for the next five years as they are not “in the interests of consumers, and not reflecting the views of our stakeholders”.
The power transmission group said it had carried out a survey that indicated consumers preferred it to invest in a more reliable network and net-zero carbon targets rather than getting short-term reductions in their monthly bills.
Draft proposals from regulator Ofgem are not flexible enough for it to do this, the FTSE 100-listed group said, particularly the proposed combination of a low base level of total expenditure, “uncertainty” around the approval process for additional totex and the low allowed baseline return and potential inability to achieve it.
“The proposals also risk disrupting our supply chain, inhibiting our ability to maintain resilient and reliable networks and endangering the critical investment required to put the UK on the path to meet net zero targets,” National Grid said in a statement on Monday, having last week submitted its responses to Ofgem's draft determinations for the ‘RIIO-2’ regulatory period for 2021 to 2026.
The company said it will “continue to engage with Ofgem at all levels, including through CEO and chair meetings, and October's open hearings, to facilitate an agreement that can create the right incentives to drive the investment and innovation needed to allow the UK to meet its clean energy ambitions, at a cost that is acceptable to consumers”.
An investor call is taking place on its website at 11am on Monday.