Under Ofgem’s new proposals, network companies will spend £17bn to upgrade the country’s electricity network between 2015 and 2023.
This figure is capped and is lower than what companies are allowed to spend now, meaning energy bills will drop by an average of £12 per year.
The part of the energy bill which makes up for the upgrading and maintenance of electricity networks makes up 8% of the average dual fuel bill.
According to the Telegraph, energy companies are already complaining about increases in other areas and there is no guarantee bills will fall as a result of this new cap.
Ofgem: ‘Part of our consistent drive to get the best deal for consumers’
In a statement, Dermot Nolan, chief executive at Ofgem said: “Today’s announcement is all part of our consistent drive to get the best deal for consumers while maintaining a stable regulatory regime which attracts investment as cheaply as possible.
“Our approach has delivered over £80 billion of investment since 1990 which has seen reliability increase and power cuts fall by 30%. At the same time, total network costs are 17% below where they were 25 years ago and electricity distribution costs are 39% lower.”
Energy companies must provide better services
Ofgem also called for network companies to provide better service to customers, particularly those who are most vulnerable. According to the energy regulator, energy companies have responded positively and will step up efforts to help consumers where necessary, such as during power cuts.
Companies which fail to improve service levels or offer enough support to those in need, will face fines.