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Current and future developments
Price controls and rate plans
The previous price control arrangements for our electricity and gas transmission businesses in the UK ceased on 31 March 2007 and have been replaced by new price controls covering the period from 1 April 2007 to 31 March 2012.
We have accepted Ofgem's final proposals in respect of the price controls covering our role as owner of electricity and gas transmission networks. The key elements of these proposals are a 4.4% post-tax real rate of return on our regulatory asset value, a £4.4 billion baseline five year capital expenditure allowance and a £1.2 billion five year operating expenditure allowance. Since our acceptance in principle of the final proposals, we have been working closely with Ofgem to agree the necessary licence amendments. This process should be completed during the first half of 2007. We have also accepted Ofgem's final proposals for the system operator schemes to apply for one year from 1 April 2007 for both gas and electricity transmission.
The current price controls for our UK gas distribution networks were extended for one year until 31 March 2008. We are currently in discussions with Ofgem on the next five year price control for the period from 1 April 2008 to 31 March 2013.
In the US, we have reached an agreement for a five year rate plan for our electricity distribution operations in New Hampshire, subject to the approval of the New Hampshire Public Utilities Commission.