By Jaime Llinares Taboada

The U.K. Competition and Markets Authority has granted permission to nine utilities to appeal against allowed returns for power and gas networks during 2021-26.

The utilities are Cadent Gas Ltd., National Grid Electricity Transmission PLC, National Grid Gas PLC, Northern Gas Networks Ltd., Southern Gas Networks PLC, Scotland Gas Networks PLC, Scottish Hydro Electric Transmission PLC, SP Transmission PLC and Wales & West Utilities Ltd.

In December 2020, energy watchdog Ofgem ruled a weighted average cost of capital of 2.81% for the RIIO-2 period running from April 2021 to March 2026. This was down from the 4% RIIO-1 average, but up from Ofgem's previous 2.63% proposal.

Analysts expect energy networks' compensations will be revised up as a result of this appeal, particularly as the CMA has recently ruled a cost of capital of 3.2% for four water utilities which also appealed against the water regulator's decision.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

(END) Dow Jones Newswires

April 01, 2021 05:01 ET (09:01 GMT)

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