OFGEM Ofgem welcomes SGN's contribution to consumers (6012X)
27 Novembre 2017 - 11:58AM
UK Regulatory
TIDM71ZU TIDM43WX
RNS Number : 6012X
OFGEM
27 November 2017
27 November 2017
Ofgem welcomes SGN's contribution to consumers
Ofgem has welcomed the voluntary contribution to consumers from
SGN the gas network company that operates across Scotland and the
south of England.
Jonathan Brearley, Ofgem's senior partner for networks, said:
"Network companies require a licence to operate, not just from the
regulator, but from their own customers who must be confident they
are getting good value for money.
"We are signalling again today that energy network companies
need to prepare themselves for a tougher round of price controls
from 2021 with lower overall returns."
During the current price control Ofgem has secured additional
savings of over GBP4.5 billion for consumers by a combination of
reduced revenues or voluntary contributions from companies.
SGN, a consortium which includes SSE, has committed to make a
voluntary contribution of GBP145 million in price control allowance
terms to consumers.
Under Ofgem's price control sharing mechanism* this will result
in GBP84 million being returned to customers.
National Grid, Cadent and Scottish and Southern Electricity
Networks, the electricity networks division of SSE, have already
agreed to make voluntary contributions to consumers.
In total, voluntary commitments made by network companies so far
will result in more than GBP650 million being returned to
consumers.
Ofgem encourages the remaining gas distribution and electricity
transmission companies to follow suit.
-ends-
Notes to editors
1. SGN's statement on its voluntary contribution is here As part
of the contribution, SGN is carrying out additional work totalling
around GBP30 million to benefit customers by enhancing the
resilience of its network, and to assist fuel poor households. The
company will fund the majority of this spending.
2. Ofgem sets price controls for the monopoly companies that run
Britain's gas and electricity networks. Gas distribution and energy
transmission companies are now more than halfway through their
2013-2021 price controls. *The price controls include a sharing
mechanism which splits any under and overspends of price control
allowances between the companies and consumers.
3. Forecast returns for gas distribution and energy transmission
companies in the 2013-2021 controls are all at the higher end of
expectations, partly due to significant improvements in efficiency.
Customers share the benefits of efficiency savings in the form of
lower charges which have helped to reduce network costs by 6 per
cent since 2013 under Ofgem's Revenue=Incentives+
Innovation+Outputs (RIIO) price controls.
4. In July, Ofgem signalled that network companies need to
prepare themselves for a tougher round of price controls from
2021.
5. On 28 March National Grid agreed to voluntarily defer
allowances from its electricity transmission price control. In
current prices this means that National Grid is deferring around
GBP589 million in allowances. The sharing mechanism results in
around GBP332 million of this being returned to customers. In
addition, National Grid has voluntarily pledged GBP150 million to a
programme to fund heating systems in fuel poor households that are
not connected to the main gas grids).
6. On 8 November, SSE announced that Scottish and Southern
Electricity Networks had agreed to make a voluntary contribution of
GBP65.1 million in allowance reductions. Around GBP39 million of
this will be returned to consumers through the price control
sharing mechanism.
Further information
For media, contact:
Chris Lock: 0207 901 7225
Media out of hours mobile: 07766 511470 (media calls only)
For investors, contact:
Martin Young: 0207 901 7114
About Ofgem
Ofgem is the independent energy regulator for Great Britain. Its
priority is to make a positive difference for consumers by
promoting competition in the energy markets and regulating
networks.
For facts, figures and information about Ofgem's work, see
Energy facts and figures or visit the Ofgem Data Portal.
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Ofgem, please subscribe.
Follow us on Twitter @ofgem, LinkedIn and Facebook.
This information is provided by RNS
The company news service from the London Stock Exchange
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