Scottish & Southern Electricity Networks has urged distribution network operators to become more transparent about how they spend customers’ money, the tax they pay and the profit they make.
SSEN has launched a consultation on transparency ahead of the next set of price controls being finalised by regulator Ofgem.
Energy networks are accused of making billions of pounds in excess profits under the current regime and the regulator criticised for overseeing a golden era for shareholders. As a result, Ofgem has promised the next set of price controls, called RIIO-2, will be much tougher.
While the Energy Networks Association disputes claims of profiteering made by Citizens Advice and others, SSEN believes opening the books to greater scrutiny will improve trust.
“Opaque ownership models, tax avoidance schemes and complex financial structures are being questioned,” said SSEN chairman Gregor Alexander.
He said greater transparency is being demanded of companies, and that “well run and responsible” firms “should have nothing to fear, and everything to gain, from greater scrutiny of their financial structures, activities or performance”.
Citizens Advice welcomed SSEN’s approach and encouraged other network operators to follow suit.
The consumer watchdog also urged Ofgem to impose a regulatory requirement for transparency around ownership structures, financial risks and how well networks are performing.
“This level of openness has not been required to date – and Ofgem needs to change this ahead of RIIO-2. Increasing the transparency of these essential monopoly companies will help to ensure consumers are getting value for money,” said Citizens Advice head of networks and systems, Stew Horne.
SSEN will publish another paper around fair returns in February, with publications on consumer engagement and innovation following later in the year.
See the transparency consultation here. SSEN seeks views on five questions and wants answers by 22 February.
Related stories:
Ofgem allowing networks to make billions in excess profits, says Citizens Advice
Ofgem to take harder line on networks after allowing bumper profits
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