REG - National Grid PLC - Ofgem's RIIO-T3 Final Determination published

National GridAnnouncement

04/12/2025 07:05

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RNS Number : 2462K  National Grid PLC  04 December 2025

 

4 December 2025

National Grid plc

Ofgem's RIIO-T3 Final Determination published

 

Ofgem has today published its Final Determination for the RIIO-T3 framework
covering our National Grid Electricity Transmission business for the period
April 2026 to March 2031. The proposals include a real allowed cost of equity
of 6.12% at 60% gearing.

We welcome Ofgem's recognition of the need for significant investment into the
electricity transmission sector to continue to deliver world leading
reliability whilst nearly doubling the amount of power we can transfer around
the country.

We will now review in detail the full package contained within the Final
Determination, to assess how Ofgem have addressed the critical points we
raised in our Draft Determination response, and therefore whether it delivers
an overall framework that is both investable and workable. This includes an
incentive framework that allows high performing networks to achieve a globally
competitive overall return and totex mechanisms that enable transmission
owners to recover the efficient cost of their investments whilst progressing
projects at the pace expected by our stakeholders.

We expect Ofgem to publish the proposed licence modifications for consultation
soon. These important documents will inform our assessment of the incentive
opportunities and overall workability of the framework. Throughout this period
we will continue to work closely with Ofgem ahead of publication of its
decision on the licence in February. Relevant parties will then have 20
working days to assess the licence modifications. We anticipate announcing our
response in early March 2026.

 

Enquiries and contacts

Investors and Analysts

 Angela Broad  +44 (0) 7825 351 918
 Tom Edwards   +44 (0) 7976 962 791
 Cerys Reece   +44 (0) 7860 382 264

Media

 Alex Roache             +44 (0) 7843 802 006
 Ben Davis               +44 (0) 7914 539 999
 Dan Roberts, Brunswick  +44 (0) 207 404 5959

 

 

Cautionary statement

This announcement contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. These statements include information with respect to
National Grid's (the Company) financial condition, its results of operations
and businesses, strategy, plans and objectives. Words such as 'aims',
'anticipates', 'expects', 'should', 'intends', 'plans', 'believes', 'outlook',
'seeks', 'estimates', 'targets', 'may', 'will', 'continue', 'project' and
similar expressions, as well as statements in the future tense, identify
forward-looking statements. This document also references climate-related
targets and climate-related risks which differ from conventional financial
risks in that they are complex, novel and tend to involve projection over
long-term scenarios which are subject to significant uncertainty and change.
These forward-looking statements and targets are not guarantees of National
Grid's future performance and are subject to assumptions, risks and
uncertainties that could cause actual future results to differ materially from
those expressed in or implied by such forward-looking statements and targets.
Many of these assumptions, risks and uncertainties relate to factors that are
beyond National Grid's ability to control or estimate precisely, such as
changes in laws or regulations and decisions by governmental bodies or
regulators, including those relating to current and upcoming price controls in
the UK and rate cases in the US; the timing of construction and delivery by
third parties of new generation projects requiring connection; breaches of,
or changes in, environmental, climate change and health and safety laws or
regulations, including breaches or other incidents arising from the
potentially harmful nature of its activities; network failure or
interruption, the inability to carry out critical non-network operations and
damage to infrastructure, due to adverse weather conditions including the
impact of major storms as well as the results of climate change, due to
counterparties being unable to deliver physical commodities; reliability of
and access to IT systems, including due to the failure of or unauthorised
access to or deliberate breaches of National Grid's systems and supporting
technology; failure to adequately forecast and respond to disruptions in
energy supply; performance against regulatory targets and standards and
against National Grid's peers with the aim of delivering stakeholder
expectations regarding costs and efficiency savings, as well as against
targets and standards designed to support its role in the energy transition;
and customers and counterparties (including financial institutions) failing to
perform their obligations to the Company. Other factors that could cause
actual results to differ materially from those described in this announcement
include fluctuations in exchange rates, interest rates and commodity price
indices; restrictions and conditions (including filing requirements) in
National Grid's borrowing and debt arrangements, funding costs and access to
financing; regulatory requirements for the Company to maintain financial
resources in certain parts of its business and restrictions on some
subsidiaries' transactions such as paying dividends, lending or levying
charges; the delayed timing of recoveries and payments in National Grid's
regulated businesses, and whether aspects of its activities are contestable;
the funding requirements and performance of National Grid's pension schemes
and other post-retirement benefit schemes; the failure to attract, develop
and retain employees with the necessary competencies, including leadership and
business capabilities, and any significant disputes arising with National
Grid's employees or breaches of laws or regulations by its employees; the
failure to respond to market developments, including competition for onshore
transmission; the threats and opportunities presented by emerging
technology; the failure by the Company to respond to, or meet its own
commitments as a leader in relation to, climate change development activities
relating to energy transition, including the integration of distributed energy
resources; and the need to grow the Company's business to deliver its
strategy, as well as incorrect or unforeseen assumptions or conclusions
(including unanticipated costs and liabilities) relating to business
development activity, including the sale of certain of its businesses, its
strategic infrastructure projects and joint ventures. For further details
regarding these and other assumptions, risks and uncertainties that may affect
National Grid, please read the Strategic Report section and the 'Risk factors'
on pages 262 to 268 of National Grid's Annual Report and Accounts for the year
ended 31 March 2025, as updated by the principal risks and uncertainties
statement in its most recent half year results statement. In addition, new
factors emerge from time to time and National Grid cannot assess the potential
impact of any such factor on its activities or the extent to which any factor,
or combination of factors, may cause actual future results to differ
materially from those contained in any forward-looking statement. Except as
may be required by law or regulation, the Company undertakes no obligation to
update any of its forward-looking statements, which speak only as of the date
of this announcement. This announcement is for informational purposes only and
does not constitute an offer to sell or the solicitation of an offer to buy
any securities.

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