Tough new measures to improve electricity networks on the way

Ofgem has published “tough” new measures for electricity distribution networks (DNOs) which it claims will help improve services for consumers. The energy watchdog said the proposals, known as RIIO-ED1 (Revenue […]

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By Priyanka Shrestha

Ofgem has published “tough” new measures for electricity distribution networks (DNOs) which it claims will help improve services for consumers.

The energy watchdog said the proposals, known as RIIO-ED1 (Revenue = Incentives + Innovation + Outputs-Electricity Distribution), has been designed to encourage companies to “deliver improvements in customer satisfaction, reliability, stakeholder engagement and sustainable services at value for money to consumers”.

Through the new measures, Ofgem aims to lead customer improvements in a number of areas, including cutting the time a customer is off supply before becoming eligible for a compensation payment from 18 to 12 hours. Others include increased payment for customers who experience long power cuts, change in how companies approach long-term planning and stakeholder engagement and taking more responsibility in helping vulnerable customers.

Hannah Nixon, Senior Partner, Distribution for Ofgem said: “The RIIO-ED1 framework clearly sets out that we expect the network companies to play a full role in demonstrating improved stakeholder engagement and delivering a better customer experience at value for money to consumers.

“The network companies are important in delivering electricity to our homes but the customer doesn’t have any direct contact with them. Through this price control we are directing them to take a more active approach, such as identifying vulnerable customers and providing more help, for example when a power cut occurs. It is an important step-change in approach and we expect to see clear evidence in their business plans of how they plan to deliver for consumers.”

The new strategy will run from 2015-2023. It also covers increased take-up of low carbon technologies such as electric vehicles and heat pumps for which Ofgem has set out a clear package of targets and incentives.