Household energy bill hike will pay for £38bn UK grid upgrade
18 December 2012
Household energy bills will rise by more than £15 by 2020 to pay for a £38.2bn upgrade to the UK’s networks of gas pipelines and electricity cables, Ofgem said on December 18 as it unveiled its final plans for how much National Grid and three gas distribution companies should be allowed to spend over the next eight years.
Ofgem has set the amount to be spent by the National Grid and three gas distribution companies at £38.2bn over the next eight years
Ofgem said the total bill was £7.2bn less than the companies had originally asked for in 2011. It was however £2.1bn more than the the regulator had initially assessed as necessary in July.
National Grid, which accounts for the vast majority of the planned expenditure, had clashed with the regulator over the summer, accusing it of not adequately incentivising essential investment to maintain safe and reliable networks, and of making errors in its assessment.
Yesterday the Grid said it would spend the next few months analysing the “lengthy and complex” Ofgem documents before deciding its course of action. It may either accept the proposals - which are almost £6bn less than it originally asked for in 2011 - or seek a referral to the Competition Commission.
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