This week energy regulator Ofgem published its initial proposals for the allowed revenue levels for electricity Distibution Network Operators for the next five years. (See the "Useful Knowledge" block).
Ofgem propose to cut 19 per cent from companies' spending plans although this still leaves them with £13 billion to spend for maintaining and expanding their networks over the next five years from April 2010.
There is still a huge variation in companies' efficiency and their spending needs, which Ofgem puts down to the poor performance of some networks and the wide range of operational inefficiency. Ofgem say, "Twenty years after privatisation, there is still a wide range of operational efficiency between DNOs."
There is still a huge variation in companies' efficiency and their spending needs, which Ofgem puts down to the poor performance of some networks and the wide range of operational inefficiency. Ofgem say, "Twenty years after privatisation, there is still a wide range of operational efficiency between DNOs."
It has promised to penalise poor performers and expect shareholders to fund the poor performers until efficiency improves.