Posted on: 16/01/2018
Dermot Nolan, Chief Executive at energy regulator Ofgem, has apologised to vulnerable customers for not introducing a price cap more quickly on domestic tariffs.
He told the House of Commons’ Business, Energy & Industrial Strategy (BEIS) Committee that he wished his organisation had acted more quickly.
Ofgem’s remuneration committee has decided not to award Nolan his bonus this year due to the delay.
Nolan said: “I wish we had moved earlier in putting price caps in.”
Network profits criticised
Meanwhile, a report has claimed that profits made by electricity network companies are set to add £20 to household energy bills this year, despite regulator Ofgem introducing a new regulatory regime designed to control profit margins.
The analysis, from the Energy and Climate Intelligence Unit (ECIU), finds that in the first year of the price control mechanism known as RIIO, the six distribution network operators (DNOs), the firms that operate regional power networks, posted an average profit margin of 30.4%, with average dividends at 13.3%.
It said if DNOs continue at the same level of profit margins this year, that will make the average annual household electricity bill about £20 higher than
if their profits were at a similar level to those of the ‘Big Six’ energy firms.