Millions of people across the UK will see their electricity bills reduce by £12 on average every year from April 2015.
That’s according to Ofgem, which has set out its proposals to control electricity pricing for five of the six companies that run Britain’s local electricity network.
The regulator plans to limit the prices they charge for transporting energy into homes and businesses until 2023. The network companies are also expected to spend £17 billion to upgrade and maintain the local electricity network.
Energy distribution makes up around 8% of a typical electricity bill and is the only part directly controlled by Ofgem.
Dermot Nolan, Ofgem Chief Executive said: “Today’s announcement is all part of Ofgem’s consistent drive to get the best deal for consumers while maintaining a stable regulatory regime which attracts investment as cheaply as possible.”
Last year five of the six network companies – UK Power Networks, Northern Power Grid, SP Energy Networks, SSE Power Distribution and Electricity North West – were ordered to cut their prices after Ofgem said they failed to give customers value for money. Only Western Power Distribution had its pricing and investment plans approved.
The regulator will announce a final decision on the proposals in November after a consultation.