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In a recent Radio 5 discussion on the rise in energy prices, a participant commented that increased profits reported by the ‘big six’ energy providers were achieved on the back of price rises rather than efficiencies. It is therefore interesting to see that a report from Ofgem, the power regulator, has laid a similar comment at the door of five out of the six energy distribution companies.
Unlike the companies which sell electricity to homes and businesses and are open to competition, the six distribution companies have a monopoly control on the movement of power over the grid. With distribution costs accounting for some 19% of electricity bills, Ofgem are looking for companies to “deliver more for less.” So far only the distribution plan proposed by Western Power has been approved with Ofgem telling the other five to go further in their endeavours to provide a good deal for the consumer. This despite Ofgem’s acknowledgement that “in some areas companies showed real innovation and willingness to push boundaries. For example, several companies set out comprehensive strategies on taking a more active role in helping consumers in vulnerable situations.”
With power costs being very much to the fore, Ofgem’s comments again highlight the way in which the focus of organisations across the UK is shifting from ‘profit rules’ to providing a good deal and exceptional levels of service for the customer. In accepting Western Power’s plan Ofgem commented that it “delivered for consumers on all areas.”