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Could you be paying for a rail upgrade through your energy bills?

Cost of switching from diesel to electric trains could fall to energy suppliers and, ultimately, bill payers

Electricity BillUK consumers could end up paying for the electrification of railways through their household bills, it has been revealed.

Power network firms have claimed that UK bill payers may be forced to “fund rail electrification by the back door”, the Telegraph reports, as Network Rail is still at loggerheads with these companies as to who should pay for the rerouting of its electricity cables.

A ‘disproportionate share of the costs’

This rerouting will make way for the work to upgrade Britain’s train lines as the government pushes ahead with a plan to switch Britain’s diesel trains to electric. The new trains are touted to be more environmentally friendly, quieter, faster and with space for more passengers.

The majority of the costs of electrification will be shouldered by taxpayers. According to the power network companies, this should also include the work on their cables.

However, energy network firms are concerned Network Rail is expecting them to pay for the work, and have warned that this would see bill payers in some locations paying a disproportionate share of the costs.

Funding rail electrification ‘by the back door’

Tim Field, spokesman for Energy Networks Association, which represents the gas and electricity networks, commented: “Electricity customers should not be funding rail electrification by the back door through their bills.”

He added that the networks are currently working with Network Rail in a bid to resolve the issue and protect consumers from “potentially hundreds of millions of pounds of extra cost” through electricity bills.

Power distribution network operators are currently liable to pay to remove or move their infrastructure when Network Rail asks them to do so due to the ‘master wayleave agreements’, which were introduced back in the 1960s.

These costs are recouped through consumers’ energy bills through charges set by energy regulator Ofgem.

However, the power networks have pointed out that these agreements have always covered small, regional projects which only came to tens of thousands of pounds and count as part of normal business.

In contrast, the work needed on these cables in order to electrify the Great Western Main Line alone could add up to some £60 million. What’s more, the costs for other train lines around the UK are likely to hit hundreds of millions.

The role of energy networks

Power distribution network operators are currently preparing to submit their business plans for their spending over the next eight years to Ofgem. They are expected to ask the regulator to make sure any possible costs could be recouped from consumers. In addition, National Grid has already had its business plans passed by Ofgem, meaning it may have to ask the regulator for more funding if its networks are impacted.

Transport minister Simon Burns said that it is Network Rail “in the first instance” that needs to look at the role of energy networks in the electrification process.

He commented: “Network Rail advises that the role of the energy network operators is to provide secure, economic and reliable power supplies to meet the company’s power upgrade programme.”

A Network Rail spokesman commented that electrification will be of “significant benefit to the country”, adding: “We are in talks with the companies involved and are confident that any funding issues can be resolved between us.”