CEPA financeability and cost of equity paper published on behalf of Centrica

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21st September 2012
CEPA published a report commissioned by Centrica titled "RIIO-GD1: Assessment of Financeability and Transition Arrangements" which sets out our independent analysis of the financeability and transition arrangements proposed by Ofgem in its Initial Proposals for the next gas distribution price control (RIIO-GD1), published in July 2012. In doing so, the paper (i) summarises the approach taken in assessing financeability of regulated networks; (ii) presents an overview of the relevant measures proposed by Ofgem, and (iii) presents CEPA’s analysis of financeability for notional efficiently financed gas distribution networks, drawing on our financial modelling and commentary from equity analysis. The report's overall conclusion is that the financeability issues over the regulatory period for most Gas Distribution Networks (GDNs) may not be as significant as implied by Ofgem's Initial Proposals.