U.K. Regulator Proposes Cuts to National Grid's Spending Allowances

By Ian Walker

LONDON--The U.K. energy regulator Thursday announced a proposal to cut National Grid PLC's (NG.LN) spending allowances for its electricity and gas transmission businesses.

Following its mid-term review of the business, which started in May, Ofgem proposes a cut of 169 million pounds ($220.87 million) in National Grid's gas transmission allowance and GBP38 million in electricity transmission. Ofgem is also proposing to approve an allowance of GBP21 million so the company can enhance system outputs.

Ofgem said it is consulting on its proposals and expects to make a final decision this autumn. If approved, the changes are expected to be effective April 2018.

Ofgem set the price controls for energy transmission and gas distribution in 2013 for the period to 2021. As part of this, provision was made for a mid-period review of the outputs companies have to deliver for customers if there were material changes in government policy, or changes in the needs of consumers and network users.

-Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749

(END) Dow Jones Newswires

August 18, 2016 02:56 ET (06:56 GMT)

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