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Ofgem tells energy distribution companies to cut costs | Ofgem tells energy distribution companies to cut costs |
(about 3 hours later) | |
Energy regulator Ofgem has told five of the six electricity distribution companies to cut costs for consumers. | Energy regulator Ofgem has told five of the six electricity distribution companies to cut costs for consumers. |
It has rejected their investment plans, believing they should be able to "deliver more for less". | It has rejected their investment plans, believing they should be able to "deliver more for less". |
Only Western Power Distribution's (WPD) business plan was approved by the regulator. | Only Western Power Distribution's (WPD) business plan was approved by the regulator. |
WPD's eight millions customers will see a £11.30 reduction in their electricity bills from April 2015, thanks to Ofgem price controls, the regulator said. | WPD's eight millions customers will see a £11.30 reduction in their electricity bills from April 2015, thanks to Ofgem price controls, the regulator said. |
WPD, which serves customers in South Wales, the Midlands, and the South West of England, plans to spend about £7bn between April 2015 and March 2023, with £3bn of that being used to upgrade its network. | WPD, which serves customers in South Wales, the Midlands, and the South West of England, plans to spend about £7bn between April 2015 and March 2023, with £3bn of that being used to upgrade its network. |
Distribution accounts for about 19% of the £610 average annual domestic electricity bill, Ofgem says. | |
While Ofgem admitted that all companies had "responded well" to its price controls - with £2bn in savings achieved since 2012 - it said that "most companies can go further in cutting their costs". | While Ofgem admitted that all companies had "responded well" to its price controls - with £2bn in savings achieved since 2012 - it said that "most companies can go further in cutting their costs". |
But WPD's plans have been "fast tracked" after demonstrating "it delivered for consumers on all areas", said Hannah Nixon, Ofgem's senior partner for distribution. | But WPD's plans have been "fast tracked" after demonstrating "it delivered for consumers on all areas", said Hannah Nixon, Ofgem's senior partner for distribution. |
The six companies that own and operate Britain's electricity network have to submit their business plans for the next price control period - 2015 to 2023 - to Ofgem for approval. | The six companies that own and operate Britain's electricity network have to submit their business plans for the next price control period - 2015 to 2023 - to Ofgem for approval. |
This is because the 14 different regional distribution networks are monopolies and not open to competition. | This is because the 14 different regional distribution networks are monopolies and not open to competition. |
The six companies are WPD, Electricity North West, Northern Powergrid, UK Power Networks, SSE Power Distribution, and SP Energy Networks. | The six companies are WPD, Electricity North West, Northern Powergrid, UK Power Networks, SSE Power Distribution, and SP Energy Networks. |
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