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National Grid PLC will share some of the excess cash it has made from electricity cables to Europe ahead of schedule as regulator Ofgem and others try to help keep bills pushed down.
The company said it will pay £200 million to consumers over the next two years ahead of the schedules originally set.
The grid operator would have to pay the money anyway as it is part of the deal it signed with Ofgem, but this way the money comes to customers earlier, it said.
‘While National Grid's impact on customer bills is relatively small, we strive every day to keep our costs as low as possible,’ said its boss John Pettigrew.
‘Given how challenging the current rise in overall energy costs is for people across the country, we want to play our part in helping reduce consumer bills.’
The cash comes from cables that connect France, Belgium and Norway with the British power grid.
It means that when French electricity generators produce more than their customers can use, they can sell their excess to households in Britain.
Meanwhile, when British wind turbines spin more than British households have use for, that gets sold back to the French.
National Grid is not allowed to make more than a certain amount of money from its cables, so excess has to be paid back to consumers.
The balance is normally settled every five years, but an unprecedented crisis in the energy markets meant the company and Ofgem thought it wise to make the payments earlier.
‘This early payment of £200 million ensures consumers get value for money sooner from our regulatory framework,’ said Jonathan Brearley, the chief executive of Ofgem.
‘Our regulatory approach for interconnectors not only protects the interests of consumers, but it also promotes new investment in affordable, modern energy infrastructure.’
He added: ‘We're now working at pace to ensure this money is returned to the consumer in the fastest and most impactful way.’
The agreement comes just days after Prime Minister Boris Johnson said it is ‘insane’ that Britain is ‘mainlining energy from France’, without mentioning the energy that Britain sends in the other direction.
By August Graham, PA City Reporter
source: PA
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