Ofgem has sent back plans from five of the six companies that own and operate Britain's local electricity network, as they did not sufficiently demonstrate value for consumers.

Western Power Distribution's (WPD) business plans clearly demonstrate that they are good value for consumers and therefore are eligible to be fast-tracked by Ofgem.

Western Power Distribution, which serves customers in south Wales, the Midlands and the south west of England, is the only company that has achieved eligibility to have its price controls agreed early. WPD's business plans, which cover the period from 1 April 2015 – 31 March 2023, include around £7bn of total expenditure of which around £3bn is for investment to upgrade and maintain WPD's network. The distribution element of the electricity bill, which accounts for 19% of the average annual electricity bill, would be reduced for its customers by an average of 11.6% or around £11.30 in 2012/13 prices. These numbers are based on the cost of equity allowance within WPD's business plans. The actual return on equity to be applied is subject to our consideration of new information from the recent Competition Commission provisional determination on Northern Ireland Electricity.


Hannah Nixon, Senior Partner for Distribution said: "We understand that energy costs are a big concern for consumers and we set a high target for demonstrating value for money. We are pleased that nearly all companies have pledged to cut bills, but we feel that most companies can go further in cutting their costs and expect to see further improvements when they resubmit their plans in March.

"Western Power Distribution responded well to Ofgem's challenge to demonstrate good value and drive improvements for consumers while reducing the distribution part of their bill. I’m very pleased that our new approach to price controls, RIIO, has produced a sea change in how companies approach price controls, with all companies producing a very high standard of business plan that have customers at their heart. WPD was particularly impressive and clearly demonstrated it delivered for consumers on all areas and this is the reason it is eligible for fast-tracking."

(CD)