17th Dec 2019 15:36
(Alliance News) - UK energy regulator the Office of Gas & Electricity Markets on Tuesday said its framework for the next round of electricity distribution price controls "will lower company returns".
Ofgem also said its framework will drive electricity distribution companies further towards decarbonising power generation, transport and heating to help deliver a net zero emissions economy.
"In deciding the framework for the RIIO-ED2 price control starting from April 2023, Ofgem has set electricity distribution network companies the objectives of delivering a decarbonised, safe and resilient network that meets all consumers' needs, including vulnerable consumers," the regulator said.
Ofgem's price controls set the revenue monopoly electricity network owners can earn from charges on consumers' energy bills. Electricity distribution networks carry electricity from the high voltage transmission grid to industrial, commercial and domestic users.
The regulator will be consulting on its detailed sector-specific methodology for the electricity distribution network price control next summer.
The next electricity distribution price control period runs from April 2023 to March 2028.
"Ofgem's stable and predictable regulatory regime will allow companies to attract the investment they need to go further in decarbonising the system whilst saving consumers money by keeping returns as low as possible," said Cathryn Scott, acting executive director for systems and networks at Ofgem.
Distribution network operators in Britain include Northern Powergrid - a subsidiary of Berkshire Hathaway Energy which, in turn, is a subsidiary of Warren Buffett's Berkshire Hathaway Inc - and SSE PLC.
Shares in SSE were down 0.6% at 1,450.50 pence in London on Tuesday.
By Lucy Heming; [email protected]
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