Ofgem sends back electricity providers' cost cutting plans

Ofgem has rejected the price plans of five out of six electricity distributors. The UK's energy regulator said that the plans "did not sufficiently demonstrate value for consumers."

A plan from Western Power Distribution (WPD) was the only one to be approved by Ofgem, out of the six companies that submitted new cost cutting plans intended to lower bills.

WPD serves customers in south Wales, the Midlands and southwest England. Ofgem's price regulation will see distribution costs cut 11.6 per cent (about £11.30) for the eight million households in the supplier's areas from 2015, said the regulator. WPD's plans cover from April 2015 to March 2023 and include around £7bn of expenditure, £3bn of which is for investment in the network.

Hannah Dixon of Ofgem said: "We feel that most companies can go further in cutting their costs and expect to see further improvements when they resubmit their plans in March."