LONDON, March 7 (Reuters) - Britain’s energy regulator plans to cut the amount of money companies responsible for the country’s gas and electricity networks are allowed to return to their shareholders, a move it says will help save 1 billion pounds ($1.39 billion) a year for five years.
Ofgem proposed on Wednesday to cut the so-called “cost of equity range” to 3-5 percent for the next regulatory period starting from 2021, from 6-7 percent currently.
“In total, we estimate this would result in savings of over 5 billion for household consumers (or about 15-25 pounds per year on the dual fuel household bill) who pay for the network through their energy bills,” Ofgem said.
It also proposed cutting the regulatory period to five years from eight years and proposed setting up an independent user and consumer group to challenge and monitor company plans.
Companies have until May 2 to respond to the proposals and the final framework will be set in summer 2018. The current regulatory period runs from 2013-2021. ($1 = 0.7204 pounds) (Reporting by Susanna Twidale, editing by Louise Heavens)