NGG National Grid Plc New

By Adria Calatayud

National Grid PLC said Tuesday that it will submit a technical appeal to the U.K. Competition and Markets Authority over part of electricity and natural-gas regulator Ofgem's proposed regulation, and it said its dividend policy will change from fiscal 2022.

The FTSE 100 utilities company said it will accept Ofgem's overall regulatory package for the electricity system operator and most of the package for the electricity and gas transmission businesses.

However, National Grid said it has decided to submit a technical appeal to the CMA focused on the cost of equity and outperformance wedge. The company believes the methodology Ofgem used to set the cost of equity ignores evidence for higher total market return and risk-free rate levels, it said.

"We also maintain the view that the outperformance wedge, a downward adjustment to allowed returns in expectation of future outperformance, is conceptually and practically flawed," National Grid said.

The company said its dividend policy for fiscal 2021 is unchanged, but that it will aim to increase its annual dividend in line with U.K. CPIH inflation--the Consumer Prices Index measure including owner occupiers' housing costs--from fiscal 2022 onward.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

March 02, 2021 03:08 ET (08:08 GMT)

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