Ring fence review: energy networks call for input
Summary
Ofgem call for input on ring fence arrangements for energy networks. Reviews whether financial protections separating regulated network businesses from parent companies remain adequate.
Why it matters
Ring fencing protects consumers from parent company financial distress and ensures network investment is not diverted. Review comes as networks face large capex programmes under RIIO.
Areas affected
Related programmes
Memo
Ring fence review: energy networks call for input | Ofgem Please enable JavaScript in your web browser to get the best experience. BETA This site is currently in BETA. Help us improve by giving us your feedback . Close alert: Ring fence review: energy networks call for input Publication type: Call for input Publication date: 18 September 2024 Closed date: 11 November 2024 Status: Closed Topic: Gas distribution Decision: Energy networks ring-fence review: call for input conclusion Print this page Related links RIIO-3 Sector Specific Methodology Decision for the Gas Distribution, Gas Transmission and Electricity Transmission Sectors Decision on 2024 modifications to the Regulatory Financial Performance Reporting (RFPR) for RIIO-2 Share the page Share on Facebook Share on Twitter Share on LinkedIn We are seeking views on our proposals to review the energy networks ring fence. Who should respond We would like views from individuals and organisations. This includes network companies, energy suppliers, energy generators and system operators. We also welcome responses from consumer bodies, government, regulators, investors, credit rating agencies, consumers and any other stakeholders. Background Networks take electricity and gas from pipes, cables, transformers and towers and bring energy to homes and businesses. They connect generators, suppliers, energy users and consumers. The companies who own and operate these networks are bound by law and regulatory rules. These ensure they maintain pipes and cables that provide stable, secure and safe energy to consumers. While the protections we have in place have been broadly effective, if an energy network company were to face financial distress it could struggle to provide a basic service. This may lead to consumers experiencing power interruptions, lack of servicing and poor customer service. In some circumstances, energy bills or standing charges may increase to fund investment, putting consumers at risk. What is the ring fence? The term ‘ring fence in this context refers to a set of rules in place to protect the network company from activities of the wider group it is a part of. Energy network companies must comply with the ring fence conditions as part of their energy licence. Why your views matter We think it’s important to review the ring fence licence conditions. We want to hear your views on the current arrangements and any ideas for alternative options. Your responses to this call for input will help us identify areas for improvement and help us shape these conditions for the future. How to respond Our online call for input on reviewing the energy networks ring fence closed on 11 November 2024. Response documents Non-confidential responses for the energy networks ring-fence review call for input [ZIP, 2.87MB] Print this page Related links RIIO-3 Sector Specific Methodology Decision for the Gas Distribution, Gas Transmission and Electricity Transmission Sectors Decision on 2024 modifications to the Regulatory Financial Performance Reporting (RFPR) for RIIO-2 Share the page Share on Facebook Share on Twitter Share on LinkedIn Close