This document outlines our current thinking on our approach to assessing base costs at PR24. We are keen to build on our PR19 approach, which was largely supported by the Competition and Markets Authority (CMA), and will look to make improvements for PR24 where appropriate.
We have received some helpful feedback and suggestions in response to our PR24 May consultation ‘Creating tomorrow, together‘ and through a discussion forum with companies – a cost assessment working group (CAWG), and are looking for detailed feedback in response to this paper on the following topics ahead of the PR24 draft methodology:
- principles of PR24 base cost assessment;
- approach to developing and selecting econometric wholesale base cost models;
- improving the cost adjustment claim process;
- forward-looking capital maintenance;
- cost-service relationship; and
- considering the impact of Covid-19 when assessing residential retail costs.
We also want to use the paper to identify additional data requirements that may improve our approach to assessing base costs.
Where to send submissions
We would welcome any comments on this document. Please email them to [email protected] or post them to:
Assessing base costs at PR24: Consultation response
21 Bloomsbury St
London WC1B 3HF
The closing date for this consultation is Thursday 3 February 2022. If you wish to discuss any aspect of this consultation, please contact Daniel Mitchell by email at [email protected].