Electricity networks

To ensure the interests of consumers are protected, Ofgem should: a) do more to demonstrate that regulation is working for consumers, by developing and publishing summary indicators of the overall value for money of networks over time and across price control periods, and improving the quality of the underlying official statistics with the Office for National Statistics;

b) improve the evidence base on the empirical impact of regulatory decisions on investor confidence and cost of capital, and use this evidence to inform major decisions in future;

c) assess the extent to which cost targets set in RIIO-1 were too generous in the light of likely outturn expenditure, and use this information to inform its approach to assessing individual network company business plans for RIIO-2; and

d) ensure network companies make it clear to the public how much tax they pay; how executives are rewarded and how this links to quality of service for customers; and how dividend policies ensure companies remain sustainable.

BEIS, working with the Department for Transport, should: e) work with Ofgem to obtain as much clarity as possible on the implications of heat and transport decarbonisation for future network requirements, in advance of Ofgem making significant decisions on how distribution networks will be regulated in RIIO-2.

BEIS should: f) as part of its 2020 review on industry governance, investigate the potential benefits of more strategic coordination in the energy system; and

g) bring forward further heat decarbonisation policies that ensure the achievement of carbon emissions targets in the 2020s.