UK’s energy regulator proposes package to boost grid capacity

(Reuters) -Britain’s energy regulator proposed a spending package of 20.9 billion pounds ($25.48 billion) on Wednesday, including 2.7 billion pounds in upfront funding, as part of an initial five-year plan for sustainable and affordable regional energy grids.

The plan will boost grid capacity, improve customer service and resilience to prevent power outages, Ofgem said.

It said most customers could see a small drop in costs related to network charges as it laid out the 2023-2028 plan, which includes price controls that set the revenue which each of Britain’s 14 Distribution Network Operators (DNOs) can earn.

The regulator is proposing to reduce the cost of equity allowance for the companies to 4.75% from 6-6.4% for the current period, which ends next year.

“We’re determined to get the best possible deal for consumers and the proposals we’ve published today will mean that substantial additional investment can be made to deliver net zero without placing any further pressure on bills,” Ofgem CEO Jonathan Brearly said.

The average customer currently pays around 100 pounds ($121.89) per year to operate, maintain and reinforce such grids, the regulator said.

Ofgem will hold consultations on the proposed plan until August 25 with a final decision to be confirmed in December.

($1 = 0.8204 pounds)

(Reporting by Yadarisa Shabong and Radhika Anilkumar in Bengaluru and Nora Buli in Oslo; editing by Rashmi Aich and Jason Neely)