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Statement on Ofgem ED2 Regulatory Framework Consultation

30 Jul 2020

Scottish and Southern Electricity Networks Distribution (SSEN), the wholly-owned subsidiary of SSE plc, notes today’s release from Ofgem of its ED2 “Sector Specific Methodology Consultation”, which sets out options and early thinking for the future regulatory framework for the electricity distribution companies.

Today’s consultation marks the latest step in the development of the regulatory framework, building on discussions that have taken place over the past year with the regulator through industry working groups.

Based on our initial assessment of the consultation, itis now more important than ever that the right balance is struck between driving efficiency and affordability, and attracting the substantial investment needed, to avoid the risk of not delivering net zero.

We welcome Ofgem’s continued focus on improving core services to customers and recognition of the fundamental changes that DNO’s face in enabling the net zero transition. However, it is essential that Ofgem takes a robust and evidence-based approach and continues to listen to evidence from business and stakeholders as plans develop. In particular, it is crucial that the regulatory framework has the flexibility and agility to deliver the network infrastructure required in a timely and efficient manner.

SSEN is currently preparing its draft business plan for the ED2 price control, which starts in 2023, and is focussed on putting customers and stakeholders at its centre. Beyond providing a safe, reliable and resilient network, SSEN is committed to improving its environmental performance whilst delivering the essential strategic investment that is needed to unlock the electrification of heat and transport, that the regulatory framework must deliver.

We will continue to advocate constructively for a regulatory framework that strikes the right balance between driving efficiency and maintaining a stable investment climate, that continues to deliver improvements in network reliability, innovation and customer service, and pave the way for the strategic investment required to deliver net zero.