Value-Based Decision Making for UK Network Operators

September 12, 2017 Stefan Sadnicki

Risk Monetisation and UK Network Operators

The UK’s main utility regulatory bodies, Ofwat and Ofgem, have long been considered leaders among international regulators in the water, gas and electrical distribution sectors. In recent years, regulators have begun to place more emphasis on the outcomes of network operators’ portfolio plans, and the associated impact that investments have on customers and other stakeholders.

In short, UK regulators have been demanding more transparent, quantifiable justifications for utilities’ investment plans. Ofgem in particular has recommended a standardised approach to the monetisation of risk for sustainment through the CNAIM methodology (for electrical distribution network operators) and the NOMs methodology (for gas distribution operators).

Copperleaf recently published a white paper that summarises these developments and their effect on asset investment decision making in the UK. In this paper, we highlight the benefits of the methodologies used within the UK and identify several opportunities for improvement. Our insights are driven by our work with organisations such as Anglian Water and Northern Gas Networks—who selected C55 for its ability to fulfill immediate regulatory reporting requirements and provide a foundation for outperformance and future innovation.

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About the Author

Stefan Sadnicki

Stefan is Managing Director for Copperleaf in EMEA. Stefan joined Copperleaf in 2014 as the first employee situated in Europe. Since then, Stefan has been responsible for developing Copperleaf's operations and has seen the team expand across EMEA, delivering exceptional value and providing extraordinary experiences to a growing number of clients. His background is business analytics and consulting and he is an active member of The Institute of Asset Management (IAM).

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