Ofgem approves Western Power Distribution's business plans for next price control
Ofgem has today fast-tracked Western Power Distribution (WPD) after we assessed that the company’s business plan for the RIIO-ED1 period clearly demonstrates good value for consumers.
The RIIO-ED1 price control will run from 1 April 2015 – 31 March 2023. WPD’s business plan includes total expenditure of approximately £7bn of which around £3bn is for investment to upgrade and maintain their network. The distribution element of the electricity bill, which accounts for 19% of the average annual electricity bill, will be reduced for its customers in 2015/16 by an average of 13.9% or around £13.50 in 2012/13 prices. These savings have increased from previous forecasts following Ofgem’s recent decision to change the way in which the cost of equity is determined.
Plans by the other five companies that own and operate Britain’s local electricity network in November 2013 were sent back as Ofgem considers they can deliver more for consumers for less. The five companies will submit revised plans in mid-March.
Notes for editors
- Ofgem’s fast track decision and final determination for WPD is available on the RIIO-ED1 section of our website.
- The companies who will submit revised plans in March are Scottish Power Energy Networks (SP), UK Power Networks (UKPN), Scottish and Southern Energy (SSE), Northern Powergrid and Electricity North West.
- Western Power Distribution serves customers in south Wales, the Midlands and the south west of England. It is the only company that has achieved eligibility to have its price controls agreed early.
- The RIIO framework (Revenue = Incentives + Innovation + Outputs) incentivises companies to meet environmental targets and secure energy supplies, while delivering long-term value for money for consumers. RIIO also puts in place greater incentives and penalties to stimulate greater efficiency and innovation from companies.
- Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority’s powers and duties are largely provided for in statute, principally the Gas Act 1986, the Electricity Act 1989, the Utilities Act 2000, the Competition Act 1998, the Enterprise Act 2002, the Energy Act 2004 as well as arising from directly effective European Community legislation.
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