Ofgem Challenges National Grid Cost Plan For Hinkley Point Upgrade

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The U.K.'s energy regulator Ofgem said it believes the network grid upgrade to connect the new Hinkley Point C nuclear power station in England and the electricity network can be completed for less than the 840 million pounds ($1.08 billion) proposed by National Grid PLC (NG.LN).

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National Grid, owner of the electricity transmission system in England and Wales, submitted its economic case for the upgrade in March. Ofgem said Wednesday that it is challenging 20% of National Grid's proposed costs, particularly in relation to the treatment of how severe weather could delay construction of the grid upgrades.

Ofgem said it has launched a consultation and will make a final decision on whether the upgrade is needed and if so how it should be delivered by the end of this year.

A decision on what costs will be allowed for the upgrade would be made in late 2018 or early 2019, Ofgem said.

-Write to Rory Gallivan at rory.gallivan@wsj.com; Twitter: @RoryGallivan

(END) Dow Jones Newswires

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August 30, 2017 02:43 ET (06:43 GMT)