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(Alliance News) - UK energy regulator Ofgem on Wednesday set out its price control plan for the next five years, saying most consumers could see a small drop in costs related to electricity network charges.
In response, power utility SSE PLC called Ofgem's initial determination "tough and stretching". It said it will review the plan and engage with Ofgem ahead of its final determination.
National Grid PLC also said it will work with Ofgem in the coming months, saying final determinations are expected in December.
Ofgem noted the average customer in the UK pays GBP100 per year toward the costs of operating local grids, which is in addition to what they pay for the electricity itself. The new price controls for 2023 to 2028 set the revenue that Britain's 14 distribution network operators can earn from these charges.
Ofgem also proposed a GBP20.9 billion package of funding to build greener power grids. This will come at the expense of investors, rather than consumers, the regulator vowed.
"Increased investment for net zero [will] be delivered without increasing network charges on consumer bills, achieved through tough efficiency challenges on network companies and lower returns for investors," Ofgem said.
Ofgem Chief Executive Jonathan Brearley said: "These are challenging times, and this is the path out of relying on expensive and polluting imported fossil fuels and moving to a home-grown energy system, that exploits the best of modern technology to level out demand and reduce costs for consumers.
"We're determined to get the best possible 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."
Shares in SSE were down 0.1% at 1,664.50 pence on Wednesday morning in London while National Grid shares were up 1.3% at 1,083.50p.
By Heather Rydings; heatherrydings@alliancenews.com
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