Networks see £1.5bn boost from surging inflation

Energy networks have seen their regulatory asset value (RAV) grow by £1.5 billion as a result of higher than expected inflation, Ofgem has estimated. The regulator has proposed a series of options to claw back inflation-driven benefits, including introducing a cap on inflation-driven outperformance, a true-up adjustment at the end of a price control or a tightening of the rules on how dividends can be shared. However, networks have warned the regulator that any retrospective steps would compromise its integrity.

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