27 September 2004 00:00 Tough negotiations continue over Central Networks' investment and staffing plans

Central Networks is continuing its discussions with industry regulator Ofgem over plans to improve network performance and customer service for the next five years.

The company, formed by the merger of East Midlands Electricity and Midlands Electricity earlier this year, received Ofgem’s latest response to its plans last night.

Central Networks Managing Director Bob Taylor believes it is vital for Ofgem to recognise that network resilience needs to be improved and that there are enough engineers on the ground to give a better service to customers.

“We realise that customers expect us to make an already reliable electricity service even better and we want to be able to respond to them,” he said.

“The best way for us to respond to that customer requirement is to stop problems happening in the first place, and Ofgem’s proposals simply don’t allow us to do this.”

As a directly regulated business, levels of spending by Central Networks are tightly controlled by Ofgem, which sets the allowed investment and operating costs for all electricity distribution companies.

“Our aim is to spend an extra £100m a year between 2005 and 2010 to make our network more reliable,” said Bob.

“I think it’s very telling that, when we’ve asked our customers if they’d like a more resilient electricity supply in exchange for 10p a week, they’ve said ‘Yes’, which is something that Ofgem’s ignoring at the moment.

“That said, we have made some progress with Ofgem but there’s still a long way to go – especially as Ofgem’s proposals mean that some of our vital kit would be expected to last for more than 100 years.”

If Central Networks’ spending plans were approved it could result in a small increase in electricity bills in the Midlands of around £5 a year by 2010, some of which could go towards special projects.

“We’ve also been pushing Ofgem hard to make some small allowance for areas of particular natural beauty – especially national parks – where we want to selectively underground cables rather than have overhead lines,” said Bob.

This is the second of three sets of proposals from Ofgem. The final spending levels for Central Networks are expected to be set by Ofgem by the end of the year.

Ends

Notes to editors:
• All electricity distribution businesses are regulated by the Government through Ofgem, with the amount of capital expenditure and operating costs for the network set by the regulator;
• Central Networks presented its initial investment plans for the period 2005-10 to the regulator earlier this year;
• Central Networks brings power to 4.8 million customers across the East and West Midlands through 133,000km of underground and overhead cables – enough to go round the world more than three times – and via almost 97,000 substations;
• Central Networks covers an area from the Peak District in the north to the suburbs of Bristol in the south, and from the Welsh borders to the Lincolnshire coast.

For more information contact:
Jonathan Smith on 024 7642 5741
Rebecca Jackson on 024 7642 4583
Out of hours, call 024 7642 4000 and ask for the duty press officer