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Energy: Prices

Volume 502: debated on Wednesday 9 December 2009

To ask the Secretary of State for Energy and Climate Change (1) what recent representations he has made to Ofgem on the fifth Distribution Price Control Review; and if he will make a statement; (302555)

(2) with reference to the fifth Distribution Price Control Review, what assessment he has made of the effect a settlement below that requested by the distribution network operators would have on the level of economic growth;

(3) with reference to the fifth Distribution Price Control Review, what assessment he has made of the effect a settlement below that requested by the distribution network operators would have on the connection of new onshore renewables to the National Grid and the achievement of climate change targets;

(4) with reference to the fifth Distribution Price Control Review, what assessment he has made of the effect a settlement below that requested by the distribution network operators would have on (a) maintaining secure energy supplies and (b) the standard of customer service, particularly in rural areas;

(5) with reference to the fifth Distribution Price Control Review, what estimate he has made of the effect a settlement below that requested by the distribution network operators would have on the number of highly skilled jobs.

Ministers and officials meet with Ofgem representatives and distribution network operators representatives regularly to discuss a wide range of issues, including the fifth Distribution Price Control Review (DPCR5).

As economic regulator of the electricity industry, it falls to Ofgem to administer the distribution price control regime. Ofgem published its final decision on DPCR5 on 7 December, after a period of consultation with DNOs and other interested parties.

The price control regime ensures DNOs can, through efficient operation, earn a fair return after capital and operating costs while limiting costs passed on to customers. DNOs can reject a price control, in which case it will be considered by the Competition Commission.