Response to consultation on a potential RIIO-T1 and GD1 mid-period review

Citizens Advice response, January 2016 207 KB

Each energy network is governed by an eight year price control - the revenues that companies are allowed to charge consumers in this period. Mid-period reviews are a central opportunity to interrogate these costs, and Citizens Advice welcomes the opportunity to offer views on the desirability of running them for the gas distribution, electricity transmission and gas transmission price controls. At £300 a year for the average consumer, network costs represent the second costliest component of the average consumer’s bill (after wholesale costs). Interrogating networks’ performance and justification for this level of charge, therefore, is a crucial part of our statutory role in representing energy consumers. We therefore welcome Ofgem’s intention to hold a mid-period review for electricity and gas transmission. However, gas distribution - at approximately £137 on average a year - orms the single largest part of consumers’ network bill. We believe consumers will be mystified as to why Ofgem are not taking this opportunity to investigate the gas distribution price control. Consequently, we strongly encourage Ofgem to undertake a mid-period review of gas distribution. We also propose that Ofgem conduct a bottom-up analysis of how these price controls have functioned to date and identify where there are opportunities to deliver better value for consumers.