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(Reuters) – UK transmission network operator National Grid said on Tuesday it had broadly accepted a price control proposal from regulator Ofgem and would invest around £ 10bn ($ 13.87bn) by 2026.
In December, Ofgem gave the green light for 40 billion pounds ($ 53.4 billion) of spending on utility networks between 2021-2026 to help prepare for more renewable energy, including a limit higher than expected on the returns of network operators.
National Grid said it was satisfied with the increase in quotas and accepted the global package for its role as operator of the electricity grid, while broadly accepting the package for electricity and transmission companies.
The price control takes effect from April 2021.
“This package will enable the critical investment required to maintain the resilience and reliability of our networks,” said National Grid.
At almost £ 2 billion a year on average, the investment would be significantly higher than during the previous price control period (RIIO-T1), he said.
However, National Grid will submit a technical call to the Competition and Markets Authority (CMA) regarding the cost of equity proposed by Ofgem and the downward adjustment of the permitted yields in anticipation of future outperformance, a- he declared.
If accepted, the six-month appeal process would begin from April and final decisions could be expected in early October.
National Grid said it expects credit metrics to remain below the threshold levels required of a BBB + / Baa1 debt rating on an ongoing basis due to the increased investment program. .
However, he said he was confident he would retain broad access to debt markets, even if agencies were to downgrade National Grid Group ratings.
National Grid also said it has revised its dividend policy and aims to generate annual dividend per share growth in line with UK HICP inflation from full year 2021 / 22.
(1 USD = 0.7209 pounds)
Report by Nora Buli in Oslo; edited by Jason Neely
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