CMA Publishes Provisional Determinations in Five-Way Appeal Against Ofgem's RIIO-3 Gas Distribution Licence Modifications
On 14 August 2026, the Competition and Markets Authority (CMA) published a summary of its provisional determinations in the Energy Licence Modification Appeals 2026, a set of five linked appeals brought against Ofgem's governing body, the Gas and Electricity Markets Authority (GEMA). The appeals were filed in early March 2026 by Cadent Gas Limited, Northern Gas Networks Limited, Southern Gas Networks plc and Scotland Gas Networks plc (in a joint application), and Wales & West Utilities Limited, each challenging modifications to their gas distribution licences that took effect on 3 February 2026. Those licence modifications implemented GEMA's RIIO-3 price control decisions of 4 December 2025, which govern how much the gas distribution companies can charge over the next regulatory period. RIIO-3 (Revenue = Incentives + Innovation + Outputs, third price control period) is Ofgem's framework for setting the revenues that network operators may recover from customers. The CMA granted permission to appeal on all grounds in late March 2026, including the contested question of how GEMA assessed ongoing efficiency across the networks. Citizens Advice was permitted to intervene on the ongoing efficiency grounds. Main hearings took place in June 2026, and the provisional determinations now issued to the parties will be followed by final determinations before the statutory deadline of 30 September 2026. The outcome will directly determine the regulated revenues available to gas distribution networks in the period ahead, affecting both network investment capacity and what consumers pay. A successful appeal on any ground could require GEMA to reconsider elements of the price control, with knock-on implications for the level of capital expenditure the networks can recover.
Why this matters
RIIO-3 price controls set the financial envelope for gas distribution networks for a multi-year period, meaning that any adjustment to the allowed revenue base following a successful appeal has compounding effects on network investment and consumer bills. Five appellants challenging the same licence modifications in a coordinated fashion signals a structurally significant disagreement between the regulator and the industry over the methodology used to assess ongoing efficiency. The CMA's provisional determinations, issued ahead of a 30 September 2026 statutory deadline, represent an important moment of regulatory accountability and will test the robustness of Ofgem's analytical approach. The outcome sets a precedent for how efficiency benchmarking in energy network price controls is challenged and reviewed, which matters for future RIIO rounds and for analogous regulatory regimes across electricity distribution and transmission.
On the Ground
This matter activates energy regulatory, administrative law, and public law practice areas. Firms advising network operators need deep expertise in regulatory economics (specifically price control methodology), appellate procedure before the CMA, and the statutory framework under the Gas Act 1986, under which the gas distribution licences are held and under which licence modification appeals are brought to the CMA. Client demand comes primarily from the appellants themselves and from any counterparty wishing to shape the final determination. A trainee working on this type of matter would prepare regulatory notification drafts, produce licence condition summaries comparing the original and modified licence terms, assist with coordination of local counsel and expert economists, and maintain remediation trackers to monitor outstanding steps before the 30 September deadline.
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