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Ofgem proposes passing GBP206 million utility costs to consumers

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Ofgem
Britain   National Grid, Wales & West Utilities, and Cadent had requested GBP144 milli

The UK energy regulator said Wednesday it has provisionally agreed to a number of funding adjustments for network providers to cover additional costs as it prepares to make a final decision in September.

Ofgem will allow energy companies to pass on a further GBP90 million in costs to consumers in order to improve "resilience to physical and cyber security threats, managing street works, and compensating landowners for work on gas pipelines."

National Grid, Wales & West Utilities, and Cadent had requested GBP144 million.

National Grid has also provisionally been allowed to pass on to consumers GBP116 million in costs in order to place electricity cables underground in Dorset. The nine kilometres of cables will be installed underground in the Dorset Area of Outstanding Natural Beauty.

National Grid had requested GBP118 million, but Ofgem believes GBP2 million has not been justified in their request. A final decision will be made in the autumn with work likely to complete by April 2022.

Ofgem also proposes to reject a request by National Grid to pass on a further GBP263 million in costs associated with the replacement of a gas pipeline and gas compressors.

FTSE 100-listed National Grid had applied for GBP140 million to replace a gas pipeline across the Humber estuary. It had asked for a further GBP123 million to replace gas compressors in order to comply with the European Industrial Emissions Directive.

"Ofgem believes some of the works are already funded by the price control and that in other areas the investment National Grid wants to make does not relate to ensuring the compressors are compliant with the Directive", Ofgem said in a statement.


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