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RIIO2: regulator promises a ‘whole system’ approach and a better environmental future

Despite being faced with growing pressure to reduce the profits earned by network companies, Ofgem has softened changes in its ‘RIIO’ price control that try to reduce returns, in part by tying costs more closely to indexes so the companies carry less risk. So instead of predicting how costs such as construction or labour will evolve over the five years of the price control, they will increase automatically with industry indexes.

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