Ofgem imposes five-year price controls on Energy Networks

Ofgem, the UK's gas and electricity markets office, has confirmed five-year price controls
for energy grid companies across the UK.

Ofgem imposes five-year price controls on Energy Networks

Price controls set the fees
that energy network companies can charge from consumers.
The five-year price control starting in 2021 is less
than the current eight-year period.

Ofgem also confirmed the cost of equity coverage, the amount paid by energy networks to its shareholders, will fall from the current 6%-7% to 3%-5%.

Energy customers currently pay around £
250 a year on a typical dual-fuel household bill.
Price controls will help save around £15 to £25 a year in energy consumption, totaling more than £5 billion
.

Ofgem also gave the NH the green light to connect the new Hinkley Point C nuclear power plant to the transmission grid
.

Jonathan Brearley, executive director of systems and networks at Ofgem, said: "The new scheme will bring tighter price controls and energy network companies will expect lower
returns.
This is part of our ongoing programme to ensure consumers have access to a reliable and secure supply of electricity at an affordable price
.
As part of our ongoing efforts to create value for consumers, we are adopting a new benchmarking approach to reduce the cost of
connecting to the new Hinkley Point C nuclear power plant.
This is another example
of how we can develop regulation to upgrade the grid while ensuring that the impact on bills is as low as possible.
”

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