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Energy bills will rise further to pay for upgrades Energy bill rises not enough, says National Grid
(about 1 hour later)
Energy bills will be an average £11 higher for the next eight years to help pay for upgrades to the UK's gas and electricity networks, href="http://www.ofgem.gov.uk/Media/PressRel/Documents1/20120716_RIIO_Press_Release.pdf" title="link to Ofgem press release" >energy regulator Ofgem has said. Proposed increases in energy bills to pay for more investment in the UK's gas and electricity networks are insufficient, National Grid says.
Ofgem said bills could rise by £7 in 2013, rising to a £15 increase in 2021. The href="http://www.ofgem.gov.uk/Media/PressRel/Documents1/20120716_RIIO_Press_Release.pdf" title="link to Ofgem press release" >energy regulator Ofgem wants energy firms to spend an extra £22bn over eight years to upgrade its networks.
The average dual fuel bill already stands at £1,310 a year. That means bills will rise by an extra £7 in 2013, increasing steadily to leave them £15 higher in 2021.
About £15bn of the proposed £22bn investment will go towards the upgrade of the electricity network in England and Wales and the UK's gas networks. But National Grid says the proposed funding is about 20% less than it needs to carry out the work properly.
The rest, approximately £7bn, will be spent on ensuring the low pressure gas networks, which deliver gas to home to businesses, are reliable and safe, the regulator said. The company, which will carry out the bulk of the work, said Ofgem's plans "differ substantially" from its own business projections.
The regulator said the work could create 7,000 jobs and secure Britain's energy supply. "While the information currently available is limited, we believe that these initial proposals will not appropriately incentivise the essential investments necessary to provide safe, reliable networks for the UK consumer and avoid delays to the achievement of the UK's environmental targets," the href="http://www.nationalgrid.com/NR/rdonlyres/037E7D21-8C50-4AC0-83BE-4BCC809EF58B/54998/Initialproposalsannouncement16Jul12.pdf" title="link to National Grid response to Ofgem proposals" >National Grid said in a statement.
The upgrades, implemented by National Grid, which runs the high voltage and high pressure gas transmission networks, could include new sub-sea electricity cables linking England and Wales with Scotland. Higher bills
The proposals would also enable the gas distribution companies to connect around 80,000 "poor fuel households" to the gas network and pay for carbon monoxide awareness programmes. Most of the upgrades will be implemented by National Grid because it runs the high voltage and high pressure gas transmission networks.
About £15bn of the £22bn investment being proposed by the regulator will go towards the improvement of the electricity network in England and Wales, and the gas networks across the whole of the UK.
The rest, approximately £7bn, will be spent on ensuring the low pressure gas networks, which deliver gas to home and businesses, are reliable and safe.
Energy firms had wanted to spend £21bn on revamping the electricity transmission system and to spend a further £9bn on its gas pipelines.
That would have meant average bills rising by between £15 and £20.
The average domestic dual fuel bill already stands at £1,310 a year.
'Unprecedented need'
Ofgem chairman, Lord Mogg said: "As Ofgem's Project Discovery set out, Britain faces an unprecedented need to invest to replace ageing infrastructure, meet environmental targets and deliver secure supplies.Ofgem chairman, Lord Mogg said: "As Ofgem's Project Discovery set out, Britain faces an unprecedented need to invest to replace ageing infrastructure, meet environmental targets and deliver secure supplies.
"This needs to be carried out at a time of global financial uncertainty, which makes attracting investment difficult but possible.""This needs to be carried out at a time of global financial uncertainty, which makes attracting investment difficult but possible."
But National Grid said the proposals "differ substantially" from its own business plan submissions, arguing that the proposed funding is about 20% less than it needs to carry out the work properly. The regulator said the work could create 7,000 jobs and secure Britain's energy supply.
"While the information currently available is limited, we believe that these initial proposals will not appropriately incentivise the essential investments necessary to provide safe, reliable networks for the UK consumer and avoid delays to the achievement of the UK's environmental targets," the href="http://www.nationalgrid.com/NR/rdonlyres/037E7D21-8C50-4AC0-83BE-4BCC809EF58B/54998/Initialproposalsannouncement16Jul12.pdf" title="link to National Grid response to Ofgem proposals" >company said in a statement. The work could include new sub-sea electricity cables linking England and Wales with Scotland.
The proposals would also enable the gas distribution companies to connect around 80,000 "poor fuel households" to the gas network for the first time, and pay for carbon monoxide awareness programmes.
Ofgem is responsible for setting price controls on National Grid and the regional gas distribution companies, Scotia Gas Networks, Northern Gas Networks and Wales & West Utilities.Ofgem is responsible for setting price controls on National Grid and the regional gas distribution companies, Scotia Gas Networks, Northern Gas Networks and Wales & West Utilities.
Ofgem's proposals will be published for consultation on 27 July, with final proposals due by December 2012.Ofgem's proposals will be published for consultation on 27 July, with final proposals due by December 2012.