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Originally Posted by Hugh
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“The UK’s distribution networks are set to invest and spend more than £33bn over the next five years. This expenditure and investment — alongside the 36,000 people employed by the sector — secures safe, sustainable, reliable networks to deliver the energy that communities need now and in the future.”
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It argues that UK households are paying the price for these payouts to owners — which include private equity, infrastructure funds and individuals such as Hong Kong’s billionaire Li family, which is weighing a £15bn sale of UK Power Networks, the country’s largest electricity network provider.
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Are owners meant to splash out billions and never, ever see a return, unless they sell? It's a bit like if you got a business loan to buy a business. The loan needs paying back. So not real profits that they can spend or be taxed on.
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The profit for the six months ended 30 September 2021 was £140.7m(2020:nil). In the current period,the Company received dividend income of £140.0m from Western Power Distribution Plc, the Company's direct wholly-owned subsidiary.
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Still doesn't change the fact that the bulk of the increase in the standing charge has nothing to do with the distribution companies.
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Standing charges cover a range of costs faced by suppliers. Rory Stoves, from comparison website Energyhelpline, says for electricity these include network costs – running and maintaining the system, the supplier of last resort scheme, and things such as the warm home discount.
Stoves says network costs “inevitably go up, especially when inflation is high, as there are rising costs for wages, materials and so on”.
But a far bigger part of the increase is from the “supplier of last resort” scheme – every household is expected to pay the billions that have gone into rescuing customers from failed companies.
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I should imagine that installation of Smart meters is in those costs as well.
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“The standing charge for gas has been increased a little, but for electricity it has been increased massively.
“The regulator has done that because there are a number of fixed costs that have gone up a lot.”
Martin highlighted the fact numerous energy firms have gone bust recently, and other companies have had to be subsidised to take these consumers on.
There are also transmission costs to bear in mind, as well as an increase to what is known as a green levy.
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