Ofgem's decision on networks funding adjustment requests
Ofgem has published its decision on requests by several energy network companies for adjustments to their funding under the regulator’s price controls.
Network companies can apply for additional allowances to cover extra costs in their price controls, which had not been forecast when they were agreed.
The decision follows Ofgem’s consultation on the requests in August.
Ofgem has also rejected the majority of National Grid’s request to recover £123 million on maintaining gas compressors. As set out in the consultation, National Grid can only recover £500,000 spending on the compressors from customers.
The consultation proposed to refuse National Grid’s request to recover around £140 million from consumers for replacing a gas pipeline across the Humber Estuary, challenging the company to provide better evidence of why this would be in consumers’ interests.
The company has since submitted new information, including evidence suggesting that the resilience of the energy system could be impacted if the pipeline isn’t replaced. Ofgem has now decided to allow National Grid to recover the efficient costs of replacing the pipeline. The company will only be allowed to recover £111 million from consumers as Ofgem considers that the project can be delivered more efficiently.
Ofgem has confirmed that National Grid, Wales and West Utilities and Cadent can recover an additional £96 million for improving resilience to physical and cyber security threats, managing street works, and compensating landowners for disruption caused by gas pipelines.
Notes to editors
- See copies of Ofgem’s final decisions.
- Ofgem sets four price controls (for gas transmission, electricity transmission, gas distribution and electricity distribution). Both the transmission and gas distribution price controls run from 2013 to 2021. The electricity distribution price control runs from 2015 to 2023. More information about the price controls and energy networks.
- National Grid Gas Transmission owns the high-pressure gas mains in Great Britain. National Grid Electricity Transmission owns the high voltage electricity grid in England and Wales. Cadent, and Wales and West Utilities are owners of some of Britain’s eight gas distribution networks.
- The pipeline National Grid Gas Transmission wants to replace runs across the Humber Estuary, taking gas from the Easington gas terminal into the national high-pressure gas system.
For media, contact:
Kieran Lowe: 0207 901 7108
Media out of hours mobile: 07766 511470 (media calls only)
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
For energy insights and updates straight to your inbox from Ofgem, please subscribe.
Latest News from
Ofgem orders E to stop transfer of former Economy Energy customers18/01/2019 14:20:00
E (Gas and Electricity) Limited was issued with a provisional order by Ofgem on 16 January 2019 to stop it completing the switch of former customers of Economy Energy to E.
Ofgem appoints Ovo Energy to take on customers of Economy Energy14/01/2019 15:15:15
Ofgem has appointed Ovo Energy to take on supplying Economy Energy’s 235,000 domestic customers. This follows a competitive process run by Ofgem to get the best deal possible for customers.
Ofgem protects customers of failed supplier Economy Energy09/01/2019 09:15:00
Economy Energy, an energy supplier with about 235,000 domestic customers, has ceased to trade.
Ofgem ban on Economy Energy over poor customer service07/01/2019 10:15:00
Ofgem has banned Economy Energy from taking on new customers until it resolves its customer service issues.
Ofgem cuts costs of a smarter, fairer and cleaner energy system18/12/2018 09:20:00
Ofgem has set out proposals to help deliver a smarter, fairer and cleaner energy system which is fit for the future and saves consumers money.
Ofgem proposes changes to SSEN’s plan for new Orkney electricity link to save consumers money17/12/2018 10:25:00
Ofgem is proposing changes to Scottish and Southern Electricity Networks’ (SSEN) plan to build a 220MW high voltage link to connect Orkney to mainland Scotland which would save consumers money.
Ofgem appoints Together Energy to take on customers of OneSelect14/12/2018 12:38:00
Ofgem has appointed Together Energy to take on supplying OneSelect’s 36,000 domestic customers.
Ofgem corporate update12/12/2018 10:15:00
Dermot Nolan, Chief Executive of Ofgem, has announced his intention to stay in his post until the end of February 2020. His appointment by the Secretary of State to the Gas and Electricity Markets Authority has been extended to that date.