In a response to the UK energy regulator, ScottishPower still expressed concern that the 4% headline rate of return is inadequate to encourage and stimulate the investment that the UK’s infrastructure requires.
In addition, the company does not view this rate of return to be consistent with the amount of investments required in order to support the delivery of the UK’s energy policy and EU carbon reduction targets, given the global competition for investment.
Frank Mitchell, head of energy networks at ScottishPower, said: “After looking at the proposals in detail as an overall package, the company welcomes the system’s transparency and predictability, and believes that, by fully implementing Iberdrola’s global model for excellence, it will be able to achieve the level of return that the group’s investors demand.
“This will require taking advantage of the opportunities included in a number of key areas within Ofgem’s proposals in respect of making strong efficiency measures and through the incentives mechanisms.”
ScottishPower said that it will continue working with its customers, staff, key contractors and Ofgem to deliver an outcome for all parties over the next five years.
