OFGEM Fleetwood gas entry point (0784B)

TIDM82HZ

RNS Number : 0784B

OFGEM

31 March 2017

31 March 2017

Ofgem proposes to reduce National Grid's allowance for its gas transmission price control

Ofgem has today proposed to reduce National Grid's allowance for its 2013-2021 gas transmission price control by GBP277.5 million. This funding relates to providing capacity for putting gas into the national high-pressure gas pipeline at the Fleetwood entry point in Lancashire.

National Grid Gas Transmission's (NGGT) obligation to provide this capacity was originally triggered by a gas shipper which bid for the capacity in an auction. However, the shipper has since defaulted on payments and no longer has a right to the capacity. We are proposing to reduce NGGT's allowance otherwise customers will be charged for investment that has not been delivered.

Ofgem is also consulting on removing National Grid's obligation to provide capacity at Fleetwood. This means that any gas shipper that wants to buy capacity there in future would have to purchase a minimum amount in one of the regular auctions that National Grid runs. This means that consumers would be better protected against the risk of paying for expensive network investment which is not needed.

Ofgem will make a final decision on the funding allowances, and on NGGT's capacity obligation this summer.

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Notes to editors

1. A link to Ofgem's proposals is here: https://www.ofgem.gov.uk/publications-and-updates/review-fleetwood-entry-point-gas-transmission

2. More information on the price control is available here: https://www.ofgem.gov.uk/network-regulation-riio-model/riio-t1-price-control

3. About Ofgem

Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.

For facts, figures and information about Ofgem's work, see Energy facts and figures or visit the Ofgem Data Portal.

Follow us on Twitter @ofgem and LinkedIn

Further information

Out of hours: 07766 511470

Chris Lock: 0207 901 7225

This information is provided by RNS

The company news service from the London Stock Exchange

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March 31, 2017 02:00 ET (06:00 GMT)