Ofgem rejects a number of electricity distribution firms business plans


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Ofgem has rejected business plans from five of the UK's biggest energy distributors after it claimed they offered poor value for the end consumers.

The UK energy regulator is determined to help combat the prospect of further increases in energy bills by rejecting five out of six companies proposals on the grounds of the lack of value they provided. The firms involved make up a large portion of the country's local electricity networks.

Ofgem ruled only Western Power Distribution (WPD), which covers the Midlands, the South West of England and south Wales, offered satisfactory proposals.

WPD's business plan covers the period from 1 April 2015 - 31 March 2023 and includes £7bn in total expenditure, with around £3bn of that being invested in upgrades and maintenance of the firm's supply network. According to Ofgem, this agreement will reduce the distribution element of electricity prices for its customers by an average of 11.6%.

In total there are 14 regional distributors operating across the UK, but the energy watchdog did not confirm the name of the five firms it felt had not offered value for money.

Ofgem senior partner for distribution, Hannah Nixon, said: "We understand that energy costs are a big concern for consumers and we set a high target for demonstrating value for money.

"We are pleased that nearly all companies have pledged to cut bills, but we feel that most companies can go further in cutting their costs and expect to see further improvements when they resubmit their plans in March."

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