Ofgem plans rise in gas distribution transport charges:
British energy regulator Ofgem has proposed an average rise in the transportation charges levied by the gas distribution networks (GDNs) of 9.7 pct in 2007-08 to help offset rising operational costs. However, Ofgem also proposed that shareholders should fund around 40 pct of the GDN's overspend on capital and non-mains replacement expenditure. The GDNs expect to overspend their total allowances for capital and non-mains replacement expenditure in the current five-year price control period by approximately 65 pct or 843 mln stg in 2005-06, Ofgem said. The regulator added that for domestic customers, for whom distribution charges make up around 15 pct of their total bill, the rise will represent an increase of around 2 pct. The existing controls come to an end on March 31 2007 but they are being extended for one year until April 2008 and then reset for the following five years until 2013. Meanwhile, Ofgem separately published its updated proposals in its consultation on the price controls for the four monopoly electricity and gas transmission companies in Britain. The capital investment planned by Ofgem under the updated proposals amounts to 5 bln stg once already agreed investment in electricity transmission infrastructure for renewable generation is added. This is double that allowed in the previous price control, the regulator said. 'Our latest refinement of the price control proposals will ensure that the UK continues to get outstanding quality of service from the power and gas transmission companies at a time when the companies will be making heavy investment to connect vital new wind farms and other electricity generation plant. At the same time we are looking to add to our already substantial tool kit that protects customers against companies who might significantly under invest,' said Ofgem chief executive Alistair Buchanan. 27.9.06