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Expenditure

Since we published our well justified business plan in July 2013, we have made a number of changes to our plan to respond to feedback from customers, stakeholders and Ofgem.  Our changes address areas where our plan appeared to be slightly expensive, reflect the latest available information and improve the clarity and structure of our plan.


We have reflected best practice across our industry in our unit costs, making £38m of further efficiency savings in our plan. The overall effect of the changes to our actual and planned expenditure is to reduce our forecast expenditure for the period 2016 – 2023 by more than £14m.  The changes are summarised in the following table:

Expenditure Table

Outputs

We consulted with stakeholders extensively on the development of the outputs that we included in our previous plan.  Ofgem’s feedback confirmed our view that our plan included well developed output proposals.  We have therefore made very few changes to our output proposals.  The changes we have made following stakeholder engagement and Ofgem feedback are:

  • We have removed the specific commitment to spend £1 million each year on social outputs but have added a number of additional outputs.  We believe that focusing on the delivery of these commitments is more appropriate that just spending a fixed amount of money. 
  • Despite there being an exemption available for severe storms that allows DNOs to only compensate customers after 48 hours, wherever possible we will continue to pay compensation after 18 hours.
  • We have reviewed Ofgem’s published targets for both the time to quote and the time to connect small service connections.  After testing with stakeholders, we have set revised targets in line with the targets for maximum reward


Revenues & Prices


The changes to our plan result in further reductions to the revenues that we propose to raise from customers from 2016 to 2023.  Our proposed base revenues drop by a further £76m relative to our July 2013 plan.


Overall, the impact on prices that will be paid by domestic customers as a result of our new plan is a reduction of £19.72 (or 18%) from 2014-15 to 2015-16.  The average price paid by domestic customers in RIIO-ED1 will be £87.38 per year.  This is 16% lower than the average price paid across the DPCR5 period.


Document Downloads:

Summary of Main Changes.pdf 
Download Section 6 (Finance and Prices.pdf)