Ofgem commitment to be tougher on energy networks “good news for consumers”

Citizens Advice has welcomed the announcement by the energy regulator Ofgem that it will set tougher limits on the money that energy networks can make from 2021. Ofgem has said that when it sets the next price control for these companies, they should expect lower returns. The national charity has also called on the energy network firms to return their excess profits from the current price control to consumers through a rebate on their bills.

Victoria MacGregor, Director of Energy at Citizens Advice, said: “It’s good news for consumers that the regulator has committed to tougher controls on the amount of money that energy networks can make. It is important to remember that consumers are paying for the £7.5bn of unjustified profits that the businesses responsible for gas and electricity networks are making over the current 8-year price control – so it is welcome that Ofgem is taking action to stop this being repeated.

“Ofgem is right to recognise the need to stop consumers overpaying by setting a lower cost of capital that properly reflects how risky these businesses are for investors, as well as the actual cost of debt. However, it shouldn’t just be a case of reducing costs in the future – energy networks can help consumers now by providing a rebate on their bills to account for the unjustified profits.  If they don’t do it off their own back the government should consider stepping in.”