Cadent seeks independent view from the Competition and Markets Authority of Ofgem's Final Determination of its RIIO-2 Business Plan

Corporate

  • Cadent submits appeal to Competition and Markets Authority
  • Seeking independent view of Ofgem’s Final Determination of its RIIO-2 Business Plan
Cadent is the UK’s largest gas distribution network. We deliver energy to over 11 million homes, around half of all homes and businesses that use gas in the UK.

Our five year business plan was developed after listening carefully to the voice of our customers and stakeholders about their expectations of us and what services they are willing to pay for. 
 
Our plan, which was developed with the intention of setting the new efficiency benchmark for our industry, was subject to robust and critical challenge by our independent customer engagement group.  As a result, it was the only one rewarded by Ofgem for the quality of our plan and the additional value it represented to customers.
 
In addition, our investment plans also reflected the challenges we face to successfully navigate the different potential pathways to deliver Net Zero - an area in which we are leading in the development of a hydrogen energy future.  We do not believe that the Final Determination strikes the right balance between bill reductions and funding the much-needed investment required to deliver improved services to our customers and Net Zero.
 
Throughout the process we have worked constructively with Ofgem, however, after very careful deliberation, we have taken the next step in the regulatory process as we consider our customers’ interests are now best served by seeking an independent view of key aspects of our Final Determination by the Competition and Markets Authority.

Dr Tony Ballance, Chief Strategy & Regulatory Officer at Cadent explained:

“Cadent plays a vital role keeping the energy flowing to over 11 million homes and businesses across the UK - and a leading role in transitioning the gas sector to a low carbon economy.

“To enable us to lead the way in this role over the next five years, we submitted a robust and very ambitious business plan to Ofgem in December 2019.  This was a plan built on the most extensive and tailored customer and stakeholder engagement programme, providing what we believe was the best option for our customers - ensuring Cadent can continue to deliver a safe and reliable energy network now, and lead the development of a net zero future.

“We have thoroughly reviewed Ofgem’s Final Determination on our plan, published in December 2020 and have engaged with them very collaboratively throughout the process.  After a great deal of careful deliberation, Cadent has decided to take the next step in the regulatory process and appeal their decision to the Competition and Markets Authority.  This is because we do not believe the final determination strikes the right balance between bill reductions and future investment, that is necessary to enable us to deliver the very best service to customers and wider society.”

We believe our Business Plan delivers for our customers: over £500m worth of efficiencies; a real reduction in their gas bill of over 10% for an average customer, a bill of less than £120 a year (less than 33p/day)*; improved customer services; and leading the way to a low carbon economy, to meet the UK’s Net Zero target by 2050.

*This represents only the 25% network costs of a total gas bill.  
                  
ENDS
 
Summary of our RIIO-2 planRIIO2-infographic.pdf

Cadent's RIIO-2 Business plan - https://cadentgas.com/about-us/our-company/business-plan

Ofgem's Final Determination was published on 8 December 2020.

The price control known as RIIO-2 ensures gas distribution companies have enough revenue to run an efficient network that delivers what customers need, while investing to deliver the infrastructure needed for a Net Zero future. It stands for Revenues = Incentives + Innovation + Outputs.

RIIO-2 starts on 1st April 2021 and runs for five years until 2026.
 

Cadent

Cadent is the UK’s largest gas distribution network with a 200-year legacy.  We are in a unique position to build on strong foundations whilst encouraging the curiosity to think differently and the courage to embrace change.  Day to day we continue to operate, maintain and innovate the UK’s largest gas network, transporting gas safely and protecting people in an emergency.   Our skilled engineers and specialists remain committed to the communities we serve, working day and night to ensure gas reaches 11 million homes from Cumbria to North London and the Welsh Borders to East Anglia, to keep your energy flowing. 

Cadent manages the national gas emergency service free phone line on behalf of the gas industry - 0800 111 999*

Cadent Gas Ltd is majority owned by a consortium of global investors.

*All calls are recorded and may be monitored.

Media contacts

Stephanie van Rosse

stephanie.van-rosse@cadentgas.com

01455 231 131
07767 337 343