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Supporting an energy firm with an appeal to the Competition and Markets Authority (CMA)

PwC assisted a Gas Distribution Network (GDN) operating in Northern Ireland to review the Final Determination it received from the Utility Regulator for the price control period GD17. We conducted a high level review to identify areas of potential error, before undertaking full analysis and providing updated views. PwC then supported our client as they made an appeal to the CMA, including providing expert witnesses.

Our review focused on four areas of Firmus Energy’s Final Determination:

  • The determination of opex and capex allowances. This involved reviewing the regulators approach to cost assessment, and it’s application of top down benchmarking.
  • The calibration of connections incentive. This involved reviewing the design of a mechanism to encourage new gas connections.
  • The treatment of under-recoveries. This involved reviewing the rate of return applied to under-recovered revenues.
  • WACC and financeability: This involved reviewing the assumptions made by the regulator in determining the appropriate WACC for our client.

PwC supported our client with an initial independent view, before working closely with their legal advisors throughout the CMA appeal process. This involved several members of the team providing expert testimony to the CMA, and responding to queries from the panel.

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Nick Forrest

Nick Forrest

UK Economics Consulting Leader, PwC United Kingdom

Tel: +44 (0)7803 617744

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