By Jaime Llinares Taboada

 

The U.K. markets regulator said Thursday that it has dismissed appeals against new remuneration rules for the country's energy networks.

In December, energy regulator Ofgem set lower returns for power and gas network companies for 2021-2026 compared with the previous five-year period. Infrastructure companies including National Grid PLC and SSE PLC had appealed against the decision. Now, the Competition and Markets Authority in its final decision found in favor of Ofgem on the matter of the cost of equity--an important ratio that determines the profit that companies are allowed to retain on their regulated network investments.

Both National Grid and SSE said they are disappointed that the CMA didn't find in favor on the cost of equity.

However, the CMA has upheld the companies' appeals against the outperformance wedge and has instructed Ofgem to remove it. National Grid expects this decision will increase revenue from fiscal 2023 onward.

 

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

 

(END) Dow Jones Newswires

October 28, 2021 03:09 ET (07:09 GMT)

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