Friday 15 September 2017

Power distribution operators’ allowances cut by £200m

Ofgem has confirmed the allowances of some of Britain's electricity distribution network operators (DNOs) will be reduced by around £200 million.

It follows a review of performance in the previous price control – 2010-2015 – which assessed how much DNOs had spent and what they had delivered.

The regulator said some DNOs did not need to spend as much on reinforcing their grids.

It has therefore reduced allowances by a total of around £74 million across some of the networks of Western Power Distribution (WPD), ScottishPower, UK Power Networks (UKPN) and SSE.

Some DNOs also cancelled a number of major investment projects and spent less than expected on others where they found better ways to complete the work.

That led to Ofgem to reduce allowances by a total of £130 million across WPD's East Midlands network and two of UKPN's networks.

The reduction is expected to result in lower network network charges on energy bills during the current price control period – 2015-2023.