Citizens Advice response to the Ofgem consultation on RIIO-ED2 Distribution System Operation Incentive metrics
We are disappointed that the performance outturn metrics for the Distribution System Operation (DSO) Incentive couldn’t be refined sufficiently for inclusion within RIIO-ED2. We do recognise, however, the issues raised within the consultation which show difficulties in baselining and target setting. We recommend that work continues with Distribution Network Operators (DNOs) during RIIO-ED2 to capture data to enable baselining and target setting for RIIO-ED3. In particular, we would seek appropriate measures to be identified to be able to assess the value of increased monitoring of the Low Voltage (LV) network given the substantial consumer investment to enable this activity in RIIO-ED2.
We don’t agree with the proposal to reallocate 20% of the overall DSO incentive to the performance panel. By doing so, the performance panel (which involves a subjective review of DNO-presented evidence) would be raised to 60% weighting whereas more objective measures would reduce to 40%. We therefore recommend that the 20% of outturn metrics incentive weighting should be allocated 50/50 to both the performance panel and the stakeholder survey resulting in final 50% weightings each to the performance panel and the stakeholder survey. By this means, there is a better weighting of a more objective measure. It will also mean that the views of those stakeholders affected by connections curtailment will be captured in a more formal metric given that the curtailment efficiency metric isn’t to be introduced in RIIO-ED2.