Households to save £5bn on energy bills under new plans

7 March 2018
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Households could save £5 billion - or about £15 to £25 per year for dual fuel customers – under proposals outlined by the energy regulator.

Ofgem has set out plans for a new regulatory framework from 2021, which will see consumers pay less in network costs. As of March 2018, network costs account for around £250 of a typical annual dual fuel bill of around £1,100.

But Ofgem says its plans are expected to result in “significant savings for consumers”.

Jonathan Brearley, Ofgem’s senior partner for networks, comments: “The energy sector is rapidly changing and consumers must be confident they continue to get good value for money for the services the networks deliver. 

“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.”

Gillian Guy, chief executive of charity Citizens Advice, adds:

“Today’s announcement is a major step forward. These proposals should prevent a repeat of the billions in excess profits energy network companies are making under the current price controls. This means better value for consumers and potentially lower bills."

A consultation on the proposals closes on 2 May with Ofgem’s final view to be published by the end of 2020 following companies submitting new business plans.

See Moneywise’s Energy section for more of the latest news and money saving advice.

Comments

In reply to by anonymous_stub (not verified)

How much of the profits of the gas and electricity companies goes abroad? Once again this Government misses out on a very decent tax grab on them. We pay tax on what we use, why should the profit takers not do the same.

In reply to by anonymous_stub (not verified)

I've never understood why utility companies have a 'standing charge' to provide a service anyway... Years ago, a family member was in hospital for almost 4 months, thus never using either a drop of water or any form of energy whatsoever; she still received bills for that quarter showing these charges. We know we're being ripped off, but what choice have we? These should be abolished on moral grounds alone.

In reply to by anonymous_stub (not verified)

Why all these little discounts which often turn out to be nothing like Ofgem and government claim. Just ban the standing charges on all metered utilities , give us a striaght kWh price for energy and a striaght cu/mtr price for water, makes comparing suppliers easier as no hidden charges. Stamding charges they claim are for transport/distribution costs so why do they all vary with each tariff change when they all use same nework of pipes and cables. An old person on my own my water bill is over two thirds standing charges and increasing each year, we had a SoLow tariff for low users with no standing charge but higher cu/mtr charge, now they have stopped it because they tempted people onto water meters a real rip off. I thought they wanted people to conserve water and energy which also cuts emmisions but they go the wrong way about it.

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