Ofgem to slash energy prices
Well, this rarely happens...some good news for energy customers.
No, don't go and book an appointment at Specsavers, you read that correctly - good news for energy customers!
Watchdog Ofgem slashed the amount the supply networks are allowed to bank by £965million because lower interest rates have pushed down what it cost companies to fund debt.
Companies had also managed to cut their costs, adding to the windfall for consumers.
Ofgem controls the price of the distribution and transmission of gas and electricity by firms like National Grid.
The amount that the networks are allowed to collect in revenue has changed every year since price controls were first introduced in 2013 to make sure they are kept up to date.
Trade body the Energy Networks Association said the process is an important part of a price control system “that has allowed network companies to considerably improve their performance while keeping costs down for the public”.
“As we look to meet our net zero climate targets, the next regulatory regime must allow network companies to continue to attract significant levels of investment, while keeping their focus on innovation and delivering improved performance for the public,” it said.
The Labour Party has threatened to bring the energy networks, including FTSE-listed National Grid, back under national ownership if it forms the next government.
Shadow business secretary Rebecca Long-Bailey announced the policy in May, saying that taking the grid into public hands would help Britain through a green revolution.
However National Grid said: “These proposals for state -ownership of the energy networks would only serve to delay the huge amount of progress and investment that is already helping to make this country a leader in the move to green energy.
“At a time when there is increased urgency to meet the challenges of climate change the last thing that is needed is the enormous distraction, cost and complexity contained in these plans.”
Ofgem controls the price of the distribution and transmission of gas and electricity.
This is separate from the regulator’s price cap on what suppliers can charge customers on their default tariffs which was introduced last January.
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