Triennially we carry out a review of RIIO network companies’ pension scheme established deficits, which consumers fund through their energy bills. The companies, as part of their revenue, currently receive annually £534 million in allowances. Our review looks at the latest valuations and the governance arrangements the companies have in place. The review can revise the allowance we have set previously; these are based on the latest valuations, company proposals and/or if we consider the governance arrangement the companies have had in place is not appropriate.
Today we set out our provisional view of the revised pension allowances and our recommendations to the NWOs for changes they may want to adopt before the next reasonableness review in 2023. The provisional revised allowances are proposing an annual reduction in allowances of £212 million for the next three years.
We will make our decision by end of November 2020.