Frank Mitchell, CEO SP Energy Networks, said:
“We will now carefully consider the details of Ofgem’s final determination as we are committed to securing the right level of allowances to enable us to deliver the performance and service required by our customers throughout the eight year price control period. Overall, the industry has received a tough outcome compared with existing regulatory arrangements, and we are concerned by the reduced return on investment and further efficiency challenges from benchmarking, smart metering and reduced allowances for commodities such as copper.
“In the determination Ofgem recognised SP Distribution within its cost assessment model as being the most efficient operator and we were therefore surprised by the final level of their proposed allowances. We will now look at the detail of the determination to understand the potential impact on customers and the network.”