Ofgem approves Western Power Distribution’s price control plans

Energy regulator Ofgem has given the green light to fast track Western Power Distribution’s (WPD) proposal on how much they can charge for their services up to 2021. The RIIO-ED1 […]

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By Priyanka Shrestha

Energy regulator Ofgem has given the green light to fast track Western Power Distribution’s (WPD) proposal on how much they can charge for their services up to 2021.

The RIIO-ED1 price control sets out the amount network operators can charge customers and is designed to give them good value.

Consumers have to rely on regulation from Ofgem to limit charges from distributors as they effectively operate on a regional monopoly rather than competing with each other as the main energy companies do.

WPD’s business plan includes total expenditure of around £7 billion of which £3 billion is for investment to upgrade and maintain their network. The distribution part of the electricity bill, which accounts for around 19% on average, will be reduced for its customers in 2015/16 by an average of 13.9% – or £13.50 in 2012/13 prices.

Ofgem sent back proposals from the other five companies that own and operate Britain’s local electricity networks last November as they “did not sufficiently demonstrate value for consumers”. They are expected to submit revised plans in mid-March.

Earlier this moth the regulator proposed to place limits on investment returns the electricity distribution companies can generate.