By Adam Clark

The U.K.'s energy regulator Ofgem said Monday that it has confirmed its proposed price controls for energy networks from 2021 onward, and that it has approved National Grid PLC's (NG.LN) upgrade plans for the Hinkley Point C nuclear power station.

Ofgem said there is no change to the proposed 3% to 5% cost of equity range, which represents the amount companies can pay their shareholders. The cost of equity is currently set at 6% to 7%. However, Ofgem said the default length of the price controls from 2021 will be five years, compared with eight years currently. Ofgem estimates the price controls will save customers over 5.0 billion pounds ($6.56 billion).

The regulator said it will extend the scope for opening up network upgrades to competition in the next price-control period, and will subject network companies' spending plans to open hearings.

Ofgem said it has confirmed that National Grid can build the grid upgrade to connect the new Hinkley Point C nuclear power station in Somerset, England. However, Ofgem said it will set the revenue which National Grid can earn from the upgrade, based in part on its experience of competition for offshore wind-farm tenders.

National Grid said in response that the decision doesn't affect its plans for the upgrade. National Grid said the project is expected to cost a total of GBP650 million, with the majority of the spending incurred in the price-control period from April 2021 onward.

Write to Adam Clark at adam.clark@dowjones.com; @AdamDowJones

(END) Dow Jones Newswires

July 30, 2018 02:51 ET (06:51 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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