29 May 2007
Energy regulator Ofgem has released its initial proposals for gas distribution price controls which will apply to gas suppliers between 2008 and 2013.
One of the stipulations of the new price controls includes lowering the suppliers' outgoing expenditure by 3.3% which, while Ofgem agrees is a challenging target, should help to lower operating costs overall and could see a reduction in the cost of consumers' gas bills.
The report also encouraged the suppliers to continue their ongoing work of replacing mains and fulfilling the Health and Safety Executive's requirements on mains replacement and meeting the steady growth of consumer gas demand.
Ofgem Chief Executive, Alistair Buchanan, said: "Today is one of a number of milestones along the way to our final proposals this December. We will listen carefully to the feedback we receive. We do intend to set challenging price controls to give the companies incentives to operate more efficiently. This will generate savings for customers which will be passed on in successive price controls."
He added: "Our initial proposals set out how existing customer service obligations can be improved and we have also offered incentives to the companies to extend parts of the gas network to connect up fuel poor communities."