UK watchdog Ofgem approves a baseline total expenditure of £10.3 billion for the 2026-31 RIIO-3 regulatory regime, up from £8.8 billion in the draft determination. SSE sees its baseline total expenditure allocation increased to £3.4 billion, falling short of the requested £4.0 billion, with a cost of equity at 5.70% and a weighted average cost of capital at 5.73%.

The £10.3 billion total expenditure approved by Ofgem represents 15% of the £70 billion total prospective spending under RIIO-3. The remaining funds will be released progressively through in-period funding tools, rather than being permanently disallowed. SSE’s five-year investment plan of £33 billion, with two-thirds for transmission networks, remains unchanged. Morningstar maintains a 40% premium to forward RAV in valuing SSE’s transmission networks.

Read more at Morningstar: SSE: Ofgem Final Determination for RIIO-3 an Improvement but Below Firm’s Request; Shares Attractive