Ofgem to put a cap on electricity profits
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Version 0 of 1. The energy regulator, Ofgem, has announced plans to curb the profits of Britain's electricity distribution companies after they were criticised for a slow response to power cuts over the Christmas period. Ofgem said it would cap the "cost of capital" – a key determinant of profit – for most electricity distributors at 3.8 per cent in 2015-16, with further falls in following years. This in effect places a limit on profits by capping the return a company can make on its investment during a price control. The regulator is setting price controls for the distribution companies for the period from 2015 to 2023. |