UK: MPs call for Ofgem to crack down on energy network costs

The energy watchdog, Ofgem, has come under fire from MPs for exposing consumers to higher bills by failing to crack down on industry costs.

The Commons energy and climate change committee said new price caps for National Grid and other power distribution companies, intended to keep down the costs of distributing and transmitting gas and electricity, were too generous.

Ofgem’s chief executive, Dermot Nolan, warned the committee that it could be eight years before it becomes clear whether the new system is delivering value for money. Yeo said: “This is too long for hard-pressed consumers to wait.”

The committee called for an interim independent audit of price controls, longer notice periods before network companies put up costs and harsher penalties for network companies that fail to reduce energy leakages after being paid to do so.

Ofgem said it was already working to bring in some of the changes called for in the report, including more competition and longer notice periods for changes to charges.

An Ofgem spokesperson said: “Our regulation has delivered value for money. Britain’s energy network is 17% cheaper in real terms than 25 years ago, £80bn of investment has been secured, and reliability has improved by 30%.

“We are in the process of implementing a number of the actions the report highlights, including introducing more competition to networks and looking to increase the notification period of network charges. Additionally, we estimate that our innovation stimulus will see companies realise around £900m of benefits to consumers in the next eight years.”

Full Content: The Guardian

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