Updated timetable for RP5 Final Determination
In October 2011, the Utility Regulator published a timetable* for the completion of the fifth NIE T&D price control (RP5). This timetable indicated that the RP5 Draft Determination would be published in December 2011 with the final RP5 price control in place for October 2012.
Since then a number of events have taken place which had not been envisaged and which have had the effect of introducing new considerations into the process.
• In December 2011 the Utility Regulator Board decided that due to the material gap between the NIE T&D submission for capital investment and the proposed allowance based on the Utility Regulator assessment, it would be appropriate to allow NIE T&D more time and the opportunity to justify its proposals. Further engagement on capital investment took place during January and February 2012 and NIE T&D was asked to submit additional justification for its investment proposals. NIE used this opportunity to submit additional requests for a further £169.3M of capital investment which has required further analysis and consideration.
• In January 2012, the Utility Regulator Board decided that an investigation into changes in capitalisation practice was required. This investigation was commenced in February 2012. The process of obtaining and analysing information has taken much longer than originally envisaged. As indicated in our published note**, this is a material matter and it is important that it is given appropriate consideration. It will be subject to a short additional consultation in August/September 2012. We intend to address the outcome of the investigation as part of the overall RP5 Final Determination.
As a result of these events, the RP5 Draft Determination was not published until 19 April 2012.
Secondly, in the RP5 Draft Determination, we indicated that we expected to engage with NIE T&D during the consultation period, particularly in relation to financeability and pensions costs. However, on 7 June 2012NIE T&D wrote to us stating that it did not wish to engage with us on these matters until after the close of the consultation period. In addition, we received 32 responses to the RP5 Draft Determination consultation, all of which have required careful consideration.
In light of these events, the Utility Regulator Board now intends to publish the RP5 Final Determination on 23 October 2012.