No rise in bills from power grid overhaul, vows Ofgem
PROFITS at six power monopolies will be cut to make distribution more resilient to bad weather and pave the way to achieving net zero.
Ofgem has set out plans for network operators – companies that get electricity to millions of homes and businesses – to spend nearly £21billion over the next five years on maintenance and upgrades.
The watchdog vowed the extra investment would come from the firms raking in smaller profits rather than customers paying higher bills.
The network costs element of the average household’s annual energy bill will remain at £100, it said.
Jonathan Brearley, chief executive of Ofgem, said: “We’re determined to get the best possi- ble deal for consumers and the proposals we’ve published today will mean that substantial additional investment can be made to deliver net zero without placing any further pressure on bills.”
The energy networks were criticised after Storm Arwen last November left some households without power for up to 10 days.
An investigation found many damaged wooden power poles were more than 40 years old. The six monopolies that get power from the high-voltage grid to premises include Scottish and Southern Electricity Networks, Northern Powergrid and UK Power Networks.
Gillian Cooper, at Citizens Advice, said: “Today’s announcement is a good move towards ensuring consumers get better value for money.”
The Energy Networks Association said the proposals would “need more work”.
Scottish and Southern Electricity Networks owner SSE called the plans “tough and stretching”.
The regulator also said it was “proposing tough efficiency targets for the networks”.
But Sue Ferns, at the Prospect union, wanted to know where Ofgem expects efficiency savings to come from. She said: “Our surveys of workers show there are already significant problems of long hours and fatigue across the networks.”
Ofgem is under pressure after customers picked up the bill for failed suppliers.
It also polices the price cap for 23 million households that rocketed by 54 per cent to an average £1,971 a year in April.