'Electricity and gas projects will mean bills rise'
Major projects to improve the UK's gas and electricity networks will add an average £12 to bills over the next eight years, the regulator has announced.
Ofgem's final recommendations allow companies such as National Grid to spend a total of £24.2 billion on investing in new and upgraded infrastructure – more than the £22.7 billion proposed by the regulator in July.
But the figure is still short of the £29.4 billion originally requested by the industry, raising the prospect of a referral to the Competition Commission.
National Grid will respond to Ofgem's recommendations by March, but in the summer it accused Ofgem of not going far enough to incentivise companies to carry out the work needed.
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The cost of this investment in infrastructure projects, such as laying undersea cables linking Scotland with England and Wales, will mean tariffs lift by an average of £8.50 in 2013-14 and £7.30 the following year, rising to £15.10 in 2020-21. The price rises are not cumulative.
The UK's high-voltage electricity grid, high-pressure gas network and some of its low-pressure gas networks are run by National Grid.
The rest of the low-pressure gas network and the low-voltage electricity network are run by other companies.
These companies pass on fees to consumers and households via energy suppliers, which will rise under the proposals.
The majority of the money – up to £15.5 billion – would be used to upgrade and renew the high-voltage electricity network in England and Wales and the high-pressure gas network across the UK, creating 7,000 jobs in the supply chain.
A further £7 billion would be spent on making sure the gas networks to homes and businesses remain safe and reliable and would connect 80,000 households to the gas network for the first time.
Countryside campaigners welcomed the announcement up to £500 million could be used between 2013 and 2021 to pay for burying National Grid transmission lines through national parks or areas of outstanding natural beauty.
The Campaign to Protect Rural England (CPRE) said National Grid had also undertaken to avoid putting 50m-high pylons through precious landscapes where possible.
But pylons and cables stretch through beauty spots such as Longdendale in the Peak District, the New Forest National Park west of Southampton and towards Verwood, in Dorset, the South Downs National Park, particularly around Petersfield, the Cotswolds and the North Wessex Downs, CPRE said.
The campaign group said the money would go some way towards improving landscapes.
Paul Miner, senior planning campaigner for CPRE, said: "This is a significant step towards ridding our most precious landscapes of the blight of 50m-high pylons.
"But these improvements will take time."