As part of ENA's infographic campaign, Julie Minns, Head of Customer Engagement at UKPN, talks about the importance of energy networks delivering value for money and keeping costs down for customers. Check out the full series of ENA's infographics here.
I grew up in a working class family and like a lot of working class families, we had to budget carefully to get from one weekly pay packet to the next. My dad was a painter and decorator at the electricity board, and back then my parents counted every penny, the weekly shop was planned with military precision and nothing was ever paid for on credit. That was a very long time ago, but the experience of financial pressure never leaves you and I’m acutely conscious that the thousands of families living in fuel poverty in the UK today and having to make impossible choices every day about whether to buy food or use their electricity or gas.
I work at UK Power Networks, the company which delivers electricity to over 8million homes and businesses across London, the east and South East. We are one part of the energy value chain where you pay your energy bill to a supply company, then the industry regulator Ofgem gives electricity distribution companies like us a small portion (16% in our case) to run, maintain and upgrade the local cables and wires to ensure a safe reliable electricity supply to your property.
We keep the lights on for the 8.2m homes and businesses in the South East, East of England and London. But we’re also adapting to a changing energy system. Until recently most electricity was generated by big power stations and transferred to us by National Grid who also balance the demand and supply. However more electricity is now being generated locally and is connecting to our network, which means our grid has to be smarter and more flexible. It’s a complex role and responsibility and throughout it all, we recognise that every pound we spend is customers’ money. We strive to offer value for money, to use that precious £78 a year which comes to us from each household, as if it was cash coming out of our own pocket.
A large part of our expenditure is on projects to upgrade our networks (£500million a year) which will bring benefits for decades, and we work hard with contractors to do this in a coordinated way, to ensure value for money.
The country’s various distribution companies including UK Power Networks are responsible for operating and maintaining 800,000 km of electricity cables across the UK, which on average costs consumers 23p per day through energy bills. Since 2015, when the current pricing period began, these costs have fallen by an average £8.50 per household per year, whilst companies will invest £25 billion in the networks. The distribution companies earn returns of around 9% on average, however a sizeable part of this is dependent on achieving efficiency savings which we share with consumers.
One of the main reasons we’re currently looking at ‘smarter’ ways of managing the network is to keep costs down. In some ways, the ‘easy’ thing would be modernise the network by digging it up and replacing it all. But that would be disruptive and expensive – so we’re being smarter about how we do this, by working with customers to create a smart grid which will enable cleaner, greener energy services.
Managers like me play our part too, I carefully plan my department’s budget the same way my parents did their weekly shop. We are also working with community groups and charities to provide help and advice on energy efficiency and switching to help our customers save money.
For example we ran an Energy Café in Hastings, offering advice on fuel bills and what help’s available, and helped an older, lady with a hearing-impairment to switch to a better tariff, pay by direct debit, get a Warm Home discount and sign up for free extra help during a power cut (on our Priority Services Register).
We don’t spend anything unless it benefits our customers. Thanks to that strategy, UK Power Networks is the lowest cost network operator, improved the reliability of power supplies to 99.9% and achieved customer satisfaction scores of 86%. We’re proud of that combined achievement, and are striving to keep it that way. Nobody wants energy bills to increase, least of all us.