RIIO is Ofgem’s framework for setting price controls for network companies. Over the next decade these companies face an unprecedented challenge of securing significant investment to maintain a reliable and secure network, and dealing with the changes in demand and generation that will occur in a low carbon future.
As the regulator, we must ensure that this is delivered at a fair price for consumers. To help achieve this, we developed RIIO (Revenue=Incentives+ Innovation+Outputs), a new performance based model for setting the network companies’ price controls which will last eight years.
RIIO is designed to encourage network companies to:
- Put stakeholders at the heart of their decision-making process
- Invest efficiently to ensure continued safe and reliable services
- Innovate to reduce network costs for current and future consumers
- Play a full role in delivering a low carbon economy and wider environmental objectives.
In early 2013 we completed the first price control reviews to use the RIIO framework: RIIO-T1 (gas and electricity transmission) and RIIO-GD1 (gas distribution). We have now published our final determinations for the RIIO-ED1 price control review for electricity distribution.
The RIIO framework was developed through the RPI-X@20 project.