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Our plan is efficient and affordable, providing value for money

In this section, we talk about the importance of running the network efficiently and helping to make energy affordable for consumers. We look at how our performance is measured and the role of incentives. We also set out how we plan to ensure value for money in the future

Our plan is efficient and affordable, providing value for money

One of our key priorities is keeping energy affordable.

We strive to keep our impact on domestic and industrial consumer bills low and we work with our customers to keep energy affordable. We have a strong cost focused culture but are fully aware of the requirement to balance this with the service we deliver.

The current RIIO framework gives us a strong incentive to deliver our outcomes as efficiently as possible but we can’t cut costs at the expense of long-term consumer outcomes.

We’ve shown how we continually balance this challenge during RIIO-1 by overspending our allowances for asset health investment as we believe this is the right thing to do to maintain a safe and reliable network today and into the future.

What have you told us?

We must help to keep energy affordable for domestic and industrial consumers and this is one of our priorities.

We work hard to keep our impact on bills low – the services we provide adds less than £10 to the average annual domestic energy bill.

What will we deliver?

To deliver our proposals as cost-effectively as possible we have challenged ourselves to drive efficiencies across our activities. We have done this by:

  • building in the future benefits of our stretching UK efficiency programme, saving £150m over the full RIIO-2 period
  • making an ambitious commitment to further reduce our operating costs by £22m. This represents a further 5.6% improvement in our operating productivity by the end of RIIO-2. This is nearly three times the government’s forecast of UK productivity growth. The outcome of our total operational cost efficiencies will mean our RIIO-2 costs are 13% lower by the end of RIIO-2 than they are today
  • building in the benefits of our past successful engineering and asset management innovations to include a 4% efficiency on our direct capital investments, saving £80m.
What will it cost?

Overall, we are reducing the costs of delivering your priorities by £552m.

This will keep our impact on the household gas bill at or below RIIO-1 level.

Your feedback matters

Your feedback on our draft business plan is important to us. We want to make sure we take account of a broad range of views as we develop our plan.

Email us your feedback

You can download our full draft business plan, or these chapters here.

Download this chapter (affordable)

Download this chapter (outputs)

Download this chapter (financing)

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