Electricity networks response to Ofgem's proposals for price control review

3 August 2009

Electricity networks response to Ofgem's initial price control review proposals

Ofgem’s initial proposals for the Electricity Distribution Price Control Review (DPCR5) were published today. The review sets the revenues for the seven Distribution Network Operators (DNOs) who are responsible for distributing electricity in fourteen licence areas in GB. It is the fifth such price review since privatisation of the electricity sector.

The initial proposals are the latest stage in the review process that will determine what companies can charge over the five year period from April 2010 to March 2015.

David Smith, Chief Executive of ENA said: “The review has to balance complex issues. It must provide the money companies need to replace, modernise and strengthen their networks to maintain the high levels of network reliability that customers enjoy and expect. It also has to enable the DNOs to prepare for the significant changes to their businesses that will be required for them to play their part in the delivery of the Government’s low carbon energy future whilst ensuring that customers continue to receive value for money.”

"In constructing their business plans the companies made a thorough assessment of their expenditure requirements following extensive consultation with their stakeholders. They will now have to assess whether Ofgem’s proposal to reduce these by over £2bn puts at risk the delivery of these objectives. “We have been working closely with Ofgem and will continue to do so through to the end of the review. However, at this advanced stage of the process, it is of some concern that there remain a large number of outstanding issues. Until these are satisfactorily resolved, Ofgem will not be able to say that the process has reached a conclusion that delivers for customers, investors and the low carbon agenda.”