Thread by @StewHorne_CA

Today’s @NAOorguk Electricity Networks report proves again that energy networks enjoyed a major windfall during the current price control (RIIO-1) and consumers picked up the tab.
bbc.co.uk/news/business-…

Thread 👉

@NAOorguk The key finding is that the @NAOorguk found that consumers paid at least £800 million too much because of the way @ofgem set the equity beta (that’s an indication of how risky a company is - and so how much investors can expect to be compensated).

nao.org.uk/report/electri…

@NAOorguk @ofgem Our own 2017 research, looking at the equity beta and a range of other issues (including cost of debt and incentives) showed how electricity and also gas networks have overcharged consumers by £7.5bn during the current price control.

citizensadvice.org.uk/about-us/polic…

@NAOorguk @ofgem We’ve been looking at the way that these parts of monopoly price controls impact consumers’ costs since our 2015 report "Many Happy Returns" (shout out to @SMoore1984)

citizensadvice.org.uk/cymraeg/about-…

So it’s great to see @NAOorguk pick up on this today

@NAOorguk @ofgem @SMoore1984 .@NAOorguk also say consumers have paid more than they should have under RIIO-1. This is because:
networks’ performance targets were set too low;
their cost budgets were set too high;
Ofgem set an 8 year control instead of the usual 5, delaying the opportunity for improvements.

@NAOorguk @ofgem @SMoore1984 The good news is that @ofgem has taken these lessons on board and is set to put in place a tougher settlement next time around.

ofgem.gov.uk/publications-a…

@NAOorguk @ofgem @SMoore1984 The regulator will inevitably face push back from the networks who will try and water down the proposals. It’s crucial that @ofgem holds its nerve and delivers a price control that is good value for consumers /Ends