Chapter

Evolution and Revolution in British Energy Network Regulation: From RPI-X to RIIO

Aileen McHarg

in Energy Networks and the Law

Published in print February 2012 | ISBN: 9780199645039
Published online May 2012 | e-ISBN: 9780191738647 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199645039.003.0017
Evolution and Revolution in British Energy Network Regulation: From RPI-X to RIIO

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The United Kingdom's major contribution to the theory and practice of economic regulation is incentive regulation. Although incentive regulation has a long pedigree and can take many forms, the primary method currently employed in the UK is price cap regulation, also known by the regulatory formula RPI-X. In October 2010, the Office of Gas and Electricity Markets (Ofgem) announced that RPI-X is to be replaced by a new approach to network regulation: Sustainable Network Regulation, or RIIO. This chapter evaluates Britain's new system of network regulation. In order to provide the context necessary to understand and assess the new system, it first discusses the theory and practice of RPI-X regulation, and the Ofgem's reasons for making the change.

Keywords: energy network regulation; RPI-X; Office of Gas and Electricity Markets; network investment incentives; Sustainable Network Regulation

Chapter.  9807 words. 

Subjects: Environment and Energy Law

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