Quote:
Originally Posted by nomadking
Eg Western Power Distribution is the Electrical distributor for the Midlands, South Wales, and the South West. They will be the ones setting the distribution costs for those areas.
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Wrong.
The regional DNOs operate local monopolies and as such are highly regulated. Ofgem requires each DNO to submit a business plan and to demonstrate how the plan meets certain criteria around investment, value for money etc. Ofgem approves the plan and scrutinises the DNO’s performance against it. At the conclusion of each control period the process repeats.
Therefore the distribution cost is the result of a very detailed process in which the regulator has very significant input. To say that any DNO is “setting the distribution costs” for its area is simplistic to the point of being misleading.