It aims to ensure the network firms that manage the UK’s electricity and gas supplies will deliver services at the lowest cost to consumers.
Energy customers currently pay around £250 a year on the typical dual fuel household bill – the new proposals are expected to help save around £15 to £25 a year on bills.
The regulator’s consultation – which will run until 2nd May – on options for a new regulatory framework include setting up independent user and consumer engagement groups to challenge companies’ plans and measures to ensure they don’t pay for capacity that is not used.
Jonathan Brearley, Ofgem’s Senior Partner for Networks said: “Ofgem’s stable regulatory regime allows companies to attract investment from around the world on behalf of consumers in Great Britain at the lowest cost. We will capitalise on this by getting network companies to work harder to deliver better value for consumers in the next price controls. This will mean lower costs for consumers of £15 – £25 per year on bills and lower returns for companies.”
According to the regulator, network firms have invested around £100 billion in national and local grids since 1990 and power cuts have haled since 2001, while customer service has improved significantly.