Powering electricity networks for the future
Press release
- Publication date
- Industry sector
- Distribution Network
Related links
- Ofgem announces £17 billion for electricity network and cuts bills for consumers
- Fast-tracked: Ofgem approves Western Power Distribution's business plans for next price control
- Infographic: How Ofgem's network price control proposals (RIIO-ED1) will affect you
- RIIO-ED1: Draft determinations consultation for the slow-track electricity distribution companies
We have today set out our proposed price control settlements for five of the six companies that run Britain’s local electricity network, which transports energy into homes and businesses.
Our proposals would see the network companies spend £17 billion to upgrade and maintain Britain’s local electricity network. At the same time, this part of the energy bill – which accounts for 8% of an annual dual fuel bill – will be on average £12 a year lower than it is today for the eight-year period of the control. These proposals are planned to come into effect in April 2015 and run until 2023.
Last November, Western Power Distribution was the only company to have its price control agreed early after we judged its business plan for the eight year period showed sufficient value for consumers. We returned five out of the six companies’ plans (UK Power Networks, Northern Power Grid, SP Energy Networks, SSE Power Distribution and Electricity North West) because they failed to deliver good enough value for consumers. Since then, £2.1 billion has been cut from the plans, with companies identifying £700m of these savings and us disallowing a further £1.4 billion following analysis and benchmarking of costs.
In addition to requiring efficient investment, we challenged the companies to improve customer service and take a more active role in helping vulnerable customers. Companies have responded well and plan to improve the help to vulnerable customers for example during power cuts. Our annual customer satisfaction survey focuses companies’ attention on this important area and poor performers will face financial penalties. We have also sharpened targets to help new customers, such as businesses, new renewable generation (including community plans) and housing developments, get connected to the network faster.
Today’s announcement is all part of our consistent drive to get the best deal for consumers while maintaining a stable regulatory regime which attracts investment as cheaply as possible. Our approach has delivered over £80 billion of investment since 1990 which has seen reliability increase and power cuts fall by 30%. At the same time, total network costs are 17% below where they were 25 years ago and electricity distribution costs are 39% lower.
We will now consult for eight weeks on the proposals, and will publish our final decisions in November 2014.
For full details see: RIIO-ED1: Draft determinations consultation for the slow-track electricity distribution companies