HOUSEHOLDS face an average rise in their energy bills of up to £15 a year for the next decade as they pick up the tab for a £22billion upgrade to Britain's gas and electricity network.
Regulator Ofgem said the work – which includes laying undersea cables and maintaining gas mains – will ensure the UK's power network remains among the most reliable in the world and will create around 7000 jobs in the supply chain.
Average household bills will rise by £7 next year and by £11 to £15 by 2021 to pay for the investment, which is subject to consultation. National Grid said the plans do not allow it to put up its charges by enough to encourage the investment needed in the UK's infrastructure.
The proposals announced yesterday – which include connecting 80,000 households to the gas network for the first time – represent a much smaller amount than National Grid is understood to have asked for.
It wanted to spend £21bn on electricity transmission in the eight years from 2013, in order to connect new power plants across England and Wales, as well as an extra £9bn on gas pipelines.
However, Ofgem has said it can only spend £17bn, with a further £5bn if there is a need.
National Grid had suggested bills could increase by between £15 and £20 but Ofgem has restricted this under its "price control" regulation in a bid to keep costs down for consumers who have already been saddled with back-to-back hikes.
British Gas, which has 15.9 mil- lion residential customers, raised gas bills by 18% and electricity by 16% in August, while the UK's biggest household energy supplier, Centrica, predicted an average increase in bills of £50 this year – driven by rises in wholesale gas prices.
Meanwhile, Prime Minister David Cameron warned green energy policies sought by the Coalition could add more than £300 to the average domestic fuel bill by 2020.
Ann Robinson, director of consumer policy at uSwitch.com, said: "This is the start of a significant investment programme for our nation's energy infrastructure. The work is vital, but it will come at a cost to consumers.
"The average household energy bill is £1252 a year so it's not hard to see why an £11 increase will hurt. Already over one-third of consumers say household energy is unaffordable, while more than eight in 10 rationed their energy use last winter because of cost."
Ofgem chairman Lord Mogg said: "Britain faces an unprecedented need to invest to replace ageing infrastructure, meet environmental targets and deliver secure supplies."
However, a spokesman for the National Grid, said the level of investment approved by Ofgem was insufficient.
He added: "We believe these initial proposals will not appropriately incentivise the essential investments necessary to provide safe, reliable networks for UK consumers and avoid delays to the achievement of the UK's environmental targets."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article