Energy network price controls

RIIO-1 Network Output Measures (NOMs) Incentive Mechanism for Gas Distribution, Gas Transmission and Electricity Transmission

Direction on changes to the Network Output Measures (NOMs) Incentive Methodology

We are seeking views on how we assess the performance of network companies based on their Network Output Measures (NOMs) outputs during RIIO-1.

Details of outcome

We received 8 responses from network companies relating to our Draft Determinations.

In our Final Determinations, we have:

maintained performance assessments for all network companies
confirmed zero funding adjustments and zero incentive values for all licensees
revised the valuation approach for SP Transmission (SPT) due to concerns raised by Northern Gas Networks (NGN) about the Inverkip Rationalisation scheme

Although SPT’s performance was assessed as over-delivery, the Inverkip Rationalisation scheme was delivered through a change in scope (from replacement to partial decommissioning), which resulted in a cost saving.

We agreed with NGN that this change should not result in additional funding, as it would amount to double funding.

Therefore, we treated the Inverkip-related over-delivery as Clearly Identifiable Over-Delivery and valued it at zero.

Read the full outcome

[RIIO-1 NOMs: Final Determinations [PDF, 450.43KB]

](https://www.ofgem.gov.uk/sites/default/files/2025-11/RIIO-1-NOMs-Closeout-Final-Determinations.pdf)[Cadent response to the RIIO-1 NOMs consultation [PDF, 84.56KB]

](https://www.ofgem.gov.uk/sites/default/files/2025-11/RIIO-1-NOMs-Cadent-response.pdf)[National Grid Electricity Transmission (NGET) response to the RIIO-1 NOMs consultation [PDF, 65.76KB]

](https://www.ofgem.gov.uk/sites/default/files/2025-11/RIIO-1-NOMs-NGET-response.pdf)[National Grid Gas Transmission (NGGT) response to the RIIO-1 NOMs consultation [PDF, 175.82KB]

](https://www.ofgem.gov.uk/sites/default/files/2025-11/RIIO-1-NOMs-NGGT-response.pdf)[Northern Gas Networks (NGN) response to the RIIO-1 NOMs consultation [PDF, 580.99KB]

](https://www.ofgem.gov.uk/sites/default/files/2025-11/RIIO-1-NOMs-NGN-response.pdf)[SP Transmission (SPT) response to the RIIO-1 NOMs consultation [PDF, 33.03KB]

](https://www.ofgem.gov.uk/sites/default/files/2025-11/RIIO-1-NOMs-SPT-response.pdf)[Scotia Gas Networks (SGN) response to the RIIO-1 NOMs consultation [PDF, 233.09KB]

](https://www.ofgem.gov.uk/sites/default/files/2025-11/RIIO-1-NOMs-SGN-response.pdf)[Scottish & Southern Electricity Networks (SSEN) Tranmission response to the RIIO-1 NOMs consultation [PDF, 390.22KB]

](https://www.ofgem.gov.uk/sites/default/files/2025-11/RIIO-1-NOMs-SSEN-response.pdf)[Wales & West Utilities (WWU) response to the RIIO-1 NOMs consultation [PDF, 280.23KB]

](https://www.ofgem.gov.uk/sites/default/files/2025-11/RIIO-1-NOMs-WWU-response.pdf)

Consultation description

In RIIO-1 Network Output Measures (NOMs) were the mechanisms that provide a means to monitor and assess the network asset management outcomes that network companies deliver. They represent the service delivery resulting from companies’ asset interventions, and can be considered as a forward-looking indicator of network performance. In RIIO-1, these primarily cover specified asset replacement/refurbishment activities.

We are seeking views on our assessment of network companies’ performance in delivering their NOMs outputs during RIIO-1 as well as the proposed funding adjustments and rewards/penalties due under the NOMs Incentive Mechanism. The process for determining these is set out in the Network Output Measures (NOMs) Incentive Methodology. The assessment has been conducted for the three sectors whose RIIO-1 price controls ran for the period 1 April 2013 - 31 March 2021, i.e. Gas Distribution, Gas Transmission and Electricity Transmission.