REG - National Grid PLC - Ofgem’s Draft Determination for RIIO-ET3

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RNS Number : 1611P  National Grid PLC  01 July 2025

1 July 2025

National Grid plc

Ofgem's Draft Determination for RIIO-ET3

 

As part of the ongoing process towards agreeing a settlement for RIIO-ET3,
Ofgem has today published its draft determination which covers our National
Grid Electricity Transmission business for the period April 2026 to March
2031. This follows the submission of our final business plan in December,
which was created through extensive engagement with national, regional and
local stakeholders.

We are pleased to see Ofgem continuing to recognise the need for significant
levels of investment in networks, and the requirement for an investable
framework to support its delivery.

The Draft Determination covers Ofgem's proposed decisions on awarding
allowances for a subset of the projects included in our submission, with the
remainder expected to be confirmed through in-period processes. As such, we
continue to expect to invest around £60 billion over the 5 years to March
2029 across the Group.

We will now review the detail contained within the Draft Determination to
assess whether it delivers an investable overall financial package. We note
that progress is needed on incentive opportunities which are both good for
consumers and support investability, and we will work with Ofgem to provide
further information where requested to support our capital investment plans.

As we move towards the Final Determination in December, we will continue
working closely with Ofgem to agree a price control that ensures the reliable
and affordable flow of clean electricity whilst also meeting the ramp-up in
demand for power. A resilient, future-proofed network will be critical to
economic competitiveness and growth for Britain in the years ahead.

 

Enquiries and
contacts

 

Investors and Analysts:

 

 Angela Broad  +44 (0) 7825 351 918
 Cerys Reece   +44 (0) 7860 382 264

 

Media:

 

 Ben Davies  +44 (0) 7914 539 999

 

 

 

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 proposed 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 210 to 215 of National Grid's Annual
Report and Accounts for the year ended 31 March 2025 published on 29 May 2025.
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. The securities mentioned
herein have not been, and will not be, registered under the Securities Act or
the securities laws of any state or other jurisdiction, and may not be offered
or sold in the United States absent registration or an applicable exemption
from registration requirements. No public offering of securities is being made
in the United States.

 

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