RIIO to REV: What U.S. Power Reform Should Learn from the U.K.

After discussing the recent history of and need for regulatory reform in the U.K., this article will summarize the RIIO framework and analyze the three parts best suited for import into the regulatory frameworks of American states. Specifically, the article will evaluate how a performance-based framework with (1) longer rate cases, (2) proportionate assessment, and (3) a focus on total expenditures limiting regulatory asset value, should positively influence the U.S. regulatory landscape. While RIIO is only used for transmission and distribution in the U.K., there is a potential for its performance-based approach to be used in generation as well as transmission and distribution in the U.S. The article will discuss how RIIO could be applied across regulatory frameworks in the U.S. to vertically-integrated utilities as well as transmission and distribution networks. As the initial impetus for looking at RIIO was determining how it could apply to New York’s Reforming the Energy Vision (“REV”) process, the article will conclude with a discussion of how the parts of RIIO highlighted are likely—or not—to be implemented as part of REV, based upon the New York Public Staff’s Track 2 white paper.