National Grid and SSE PLC (LSE:SSE) expressed disappointment over the UK's competition watchdog’s final verdict in their appeal against a new price regime.
A portion of the appeal was upheld by the Competition and Markets Authority (CMA), with the outperformance wedge based on past performance scrapped, but objections to the way their business costs were calculated were dismissed.
National Grid said it was disappointed the CMA found against it over the cost of equity but was happy with the outperformance wedge decision,
“We anticipate that revenues will be increased from 2022/23 onwards to reflect the CMA's decision to remove the outperformance wedge,” it said.
SSE made similar comments, saying it was disappointed the CMA has not upheld its appeals “on the flawed Cost of Equity, or on changes to how Transmission Network Use of System Charges are recovered and the associated risk of under-recovery this presents.”
Riio-2 is designed to usher in the new age of emission-free electricity distribution in the UK with the cost of equity the baseline for how much profit the utilities can make under the new regime.