28 November 2006
Energy regulator Ofgem has unveiled its plans to force energy suppliers to cut costs in its latest publication on the gas distribution price review.
Published yesterday, the review's most recent instalment revealed that the total revenue of the gas distribution networks topped £2 billion and that in response, Ofgem would reset the price control in an effort "to create powerful incentives on companies to reduce costs".
Currently, the price control that applies to the gas distribution networks expires on March 31st next year and will be reset for one year until March 31st 2008.
Suppliers were also warned that Ofgem would be assessing not just the prices charged by the companies, but also the level of customer service, which is great news for consumers.
Ofgem recognised that companies could "cut back on the quality of their service to consumers" in an effort to make efficiency targets, something that the regulators were anxious could lead to "under investment in the network with a consequent impact on network reliability".
For this reason, Ofgem said it was launching a new series of surveys to gauge consumers' experiences and expectations of the quality of service provided to them in order to ascertain which areas of customer service were most important to consumers and to identify which areas needed to be strengthened.