Statutory consultation on modifications to NGETs licence in relation to consequential costs from ESO separation
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Funding National Grid’s consequential costs from the separation of the Electricity System Operator
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This is a statutory consultation on modifications to National Grid Electricity Transmission (NGET)’s licence. Our proposed licence modifications implement our November 2024 policy decision on funding National Grid plc (NGs)’s consequential costs resulting from the separation of the Electricity System Operator (ESO). The proposals make an adjustment to NGET's totex allowance for the remaining duration of RIIO-2. We are also consulting on modifications to NGET’s licence to introduce requirements related to the Operational Services Agreement with National Energy System Operator.
The modifications to the Special Conditions include the addition of the following:
- SpC 3.42 Consequential Costs recovery from the separation of the ESO term (CCt)
- SpC 9.21 Termination of the Operational Services Agreement
Additionally, our proposed associated modifications to the RIIO-ET2 Price Control Financial Handbook and RIIO-ET2 Price Control Financial Model (PCFM) are available in the subsidiary documents below.
The consultation is open for 4 weeks, until 12 February 2025. Responses should be sent to NESORegulation@ofgem.gov.uk and clearly marked where considered to be confidential.
Main document
[Statutory consultation NGET licence modification [PDF, 222.14KB]
Subsidiary documents
[ET2 PCFH C07 (Tracked) [PDF, 1.08MB]
](https://www.ofgem.gov.uk/sites/default/files/2025-01/ET2%20PCFH%20C07%20%28Tracked%29.pdf)
[ET2 PCFM C06 [XLSM, 3.92MB]
](https://www.ofgem.gov.uk/sites/default/files/2025-01/ET2%20PCFM%20C06.xlsm)
Response documents
[Statutory consultation on modifications to NGETs licence in relation to consequential costs from ESO separation - National Grid response [PDF, 1.24MB]
](https://www.ofgem.gov.uk/sites/default/files/2025-05/National-Grid-response-February-2025.pdf)
Related links
Funding National Grid’s consequential costs from the separation of the Electricity System Operator