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Adapting to policy and regulatory change
Scottish and Southern Electricity Networks continues to engage constructively with Ofgem and the
Department for Business, Energy and Industrial Strategy (BEIS) in relation to the development of the
regime for Extending Competition in onshore Transmission (ECIT).
The delivery of competition poses some potential risks to future growth and revenue, but also
opportunities. SSEN believes the experience it has gained both in-house and with its supply chain
means that it is well placed to participate in competitive delivery arrangements once the regime is
implemented. Through its engagement, SSEN aims to ensure that its most advanced development
projects can be delivered in a timely way under the existing framework. In the longer term, it is
working to ensure that future arrangements developed under the ECIT project will deliver the
transmission infrastructure required in a way that supports the UK Government’s policy objectives,
delivers value for end consumers and achieves a fair and reasonable return to investors.
Working with stakeholders
Under the RIIO-T1 price control, transmission owners such as Scottish and Southern Electricity
Networks are encouraged to be more responsive to changing stakeholder needs, with financial
incentives based on performance in this area. The views of stakeholders have played a key part in
SSEN’s success in electricity transmission under the current price control period and will remain
central to its future business plans.
Stakeholders have played a major part in the development of SSEN’s Visual Impact of Scottish
Transmission Assets (VISTA) policy, which seeks to mitigate the impacts of existing transmission
infrastructure in National Parks and National Scenic Areas. In August, SSEN received Ofgem approval
for its proposed approach and expects to make its first funding application under the policy in 2017.
SSEN has also responded to stakeholders’ interest in its supply chain and the economic and social
contribution that its investments make. Modelling of its £1.1bn Caithness-Moray investment has
shown that around £640m of expenditure has been, or will be, made with UK-based suppliers or
contractors. Through continuing work with its supply chain and with stakeholders, SSEN is
committed to using the outputs of this modelling to maximise the direct benefits that its activities
can bring to local economies.
Electricity Distribution
Scottish and Southern Electricity Networks is responsible for maintaining the electricity distribution
networks that supply over 3.7million homes and businesses, operating under licence as Scottish
Hydro Electric Power Distribution (SHEPD) in the north of Scotland and as Southern Electric Power
Distribution (SEPD) in central southern England.
Under the RIIO ED1 price control, SSEN's performance is assessed against the commitments made in
its business plan and this drives the revenue which is earned. The key areas addressed by the
business plan are network availability and reliability; social obligations; safety; environmental
impact; connections; and customer satisfaction. Each of these areas of focus has the current and
future needs of customers at its heart.
On 7 November 2016 Ofgem announced that it had accepted legally binding commitments from
SSEN to improve services needed for competitors to connect customers to its distribution network,
following a Competition Act investigation. As a result of accepting the commitments, Ofgem has
closed its investigation into SSEN.
Putting customers first
The focus on operational excellence has continued to see strong gains made in customer service,
which will ultimately support improving performance against the incentives built into RIIO ED1.
The most financially significant of these incentives are the two measures of loss of electricity supply:
Customer Interruptions (CIs) and Customer Minutes Lost (CMLs). Despite more challenging weather
conditions in the spring and summer of 2016, compared with 2015, SSEN’s continued adoption of
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