Western Power Distribution (WPD) has announced its intention to spend nearly £6 billion across its license areas in the Midlands, the South West and South Wales as part of the first draft of its business plan for the RIIO ED2 price control starting in April 2023.
The proposed total expenditure (totex) of £5,993 million equates to an average annual figure of £1,199 million over the five-year period. This represents an increase of almost 15 per cent when compared to its forecast average annual totex of £1,046 million for the current eight-year price control.
WPD said the extra spending will be used to decarbonise and digitalise its networks but will have a limited impact on its contribution to the typical customer’s energy bill, which is expected to remain “largely unchanged” at £96 per year.
The distribution network operator (DNO) said the publication of its draft business plan follows two years of engagement with more than 4,500 stakeholders, including customers, local authorities, charities and other energy companies.
The plan contains 67 “core commitments” such as providing a “9 out of 10” customer service, helping 75,000 fuel-poor customers to save a total of £40 million and reducing supply interruptions to an average of just under 24 minutes every two years.
WPD has also launched an online tool to enable stakeholders to provide further feedback, with the deadline for response set for 28 February. It said an updated draft will be published in March before it makes its final submission to Ofgem in December.
Chief executive Phil Swift said: “We’re delighted to be launching our first draft business plan covering 2023-2028 today and look forward to continuing our ongoing engagement with stakeholders to develop a network that is fit for the future.
“While 2020 was a challenging year with our focus on maintaining power and excellent service for hospitals, homes, and businesses, this did not stop us from planning for the future. Our priority remains – and will continue to remain – creating an electricity network that supports the ever-changing needs of customers and best meets their expectations in terms of providing operational excellence, ensuring safety and resilience of the network, and doing all of this in an environmentally sustainable and affordable manner.
“As we continue to work towards the government’s net zero targets for decarbonisation in 2050, we propose to invest £6 billion in RIIO ED2 and have intentionally undertaken a significant consultation period, which started in 2019, for our business plan to enable us to collaborate closely with a range of stakeholders and identify the best path forward to reflect all our needs and ambitions for the future of electricity in the UK.”
WPD is the first DNO to issue a draft business plan for RIIO ED2.