Ofgem tells local energy networks to do more to cut costs

22 November 2013

Energy regulator Ofgem has told five out of six local electricity networks to do more to cut costs and lower bills.

Only Western Power Distribution, which provides energy to homes across South Wales, the Midlands and the south west of England, is on course to cut costs and deliver the required value for money for consumers Ofgem is demanding by April 2015.

The networks have been submitting business plans to comply with regulation to cut costs known as ‘the distribution element' by 11.6%, which would save about £11.30 on the average household's electricity bill in today's prices by April 2015.

However, the other five networks' plans have fallen short of the required standard.

Hannah Nixon, senior partner for distribution at Ofgem, said: "We understand that energy costs are a big concern for consumers and we set a high target for demonstrating value for money.

"We are pleased that nearly all companies have pledged to cut bills, but we feel that most companies can go further in cutting their costs and expect to see further improvements when they resubmit their plans in March."

However, across the board, Ofgem said it was pleased to see the networks giving greater attention to the plight of customers in difficulty.

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It said: "Several companies set out comprehensive strategies on taking a more active role in helping consumers in vulnerable situations, working with other agencies such as the British Red Cross and National Energy Action."

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