SHEPD to receive £45.2mn for subsea cable costs

Ofgem explained its decision on 18 September to revise Scottish Hydro Electric Power Distribution’s (SHEPD’s) allowed expenditure for subsea cable costs.

This will allow SHEPD to recover £45.2mn of efficient costs for protecting subsea cables, up from £42.5mn from Ofgem’s minded-to position.

In its decision Ofgem did not allow the proposed £6.2mn for cable inspection costs. It allowed £33.7mn of the proposed £37.7mn for proactive replacement costs, £5.9mn of the proposed £9.4mn for cable fault costs (noting an increase of £2.8mn from its initial view), £5mn of indirect costs, and £0.6mn of costs associated with SHEPD’s marine risk assessment tool.

Adjustments to SHEPD’s allowed revenue will take effect from 2020-21.


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