UK energy price hikes prompt questions of network owners
Monday, December 02, 2013 - 01:33
Dec. 2 - Reuters Tom Bergin explains how Britain’s energy regulator Ofgem may have been overly generous to network owners, as households face gas and electricity price rises of up to 9% in 2014.
▲ Hide Transcript
▶ View Transcript
The price of gas and electricity has risen to the top of the political agenda it in the United Kingdom. Politicians and consumers feel that people are spending too much on utility bills. A Reuters investigation suggests that may be the case in the United Kingdom Miranda quarter. Of gas and electricity -- are made up the cost of transporting the commodities. Those prices are set by -- government regulator. Often arrives at the price and allows the owners of the network to charge a deciding what kind of rate of return they should be tour. If the rate of return is too low companies won't want to invest in the lights Nicholas. However if the rate of returns to highlight that means companies will earn excessive profits and customers' bills will be higher than -- today. -- Reuters investigation. Of -- transactions in the utility sector over the past thirteen years. Suggest if that's exactly what might it may be happening now since 2000 whenever energy networks are sold between companies. That price -- -- -- -- traded it in an average 30% premium to the value that off -- puts on those assets. 2006 documents from office -- said that this trend of facets trading above their regulatory asset value. And I quote indicates in hindsight that pass price control -- with could've been somewhat tighter. However since 2006. This trend of Athens trading at a premium to the regulatory asset value has continued some politicians and analysts say it shows that option has not been tough enough on the company's.
Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code