Profits from Grid may be capped
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.MARY FAGAN
Industrial Correspondent
Professor Stephen Littlechild, the electricity industry watchdog, warned that the National Grid Company could face a cap on profits in future, or a sharing of dividends between customers and shareholders.
The suggestion comes weeks before the planned pounds 3.5bn flotation of the Grid, owned by the 12 regional electricity companies in England and Wales.
In a consultative document issued yesterday on the future control of the NGC, Professor Littlechild asked for views on whether the price control system used at present should be scrapped.
The Grid currently keeps transmission charges to inflation minus three percentage points, but the formula expires in early 1997.
Professor Littlechild said the new control could "relate to profits or to some form of sliding scale involving prices, profits and perhaps dividends".
He also asked for views on "the basis for NGC's shareholders to receive an appropriate return, and the means of assessing this".
One City analyst said: "This shows that regulatory risk remains a big negative. It would not be good news if profit-capping was to be implemented." Even if the present system of price-capping continued, the future formula was likely to be tougher and could involve a one-off cut of up to 15 per cent.
A spokesman for the Grid said: "This is only the first communication in a discussion and we will respond in due course."
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments