National Grid proposes increase of £21bn

National Grid proposes increase of £21bn

National grid has recently proposed a plan that would cost roughly twenty-one billion pounds over an eight year period. The proposal is meant to allow National Grid to connect new power plants across England and Wales, beginning in 2013. The plan will also allocate nine billion to expand on gas pipelines owned by the company.

However the company is running into a little bit of opposition from Ofgem. While the National Grid would like to see power bills increase by about £15 and £20, however it is expected that they will not be able to realize such a high figure and may have to settle for less.

The proposed solution to the problem of being able to fund such an endeavor without having to charge much more for their services is to sell off assets to free up capital that will make it possible to expand upon the company’s infrastructure. In addition to a stated need to spend £21bn within the next decade the company has also stated that it may need to allocate another £13.5 billion to bring its four regional gas distribution networks up to date.

The suggested scheme will be the first time in National Grid’s history that it will be subjected to Ofgem’s new eight year price control system that is meant to provide consumers with a much fairer outcome. While the outcome of Ofgem’s decision is being protested by National Grid, with official results due later in the year, it is expected that the regulator is expected to take a tough stance against national Grid and their proposal for absolute control over how consumers are charged under the new plan. National Grid has said that if it is completely necessary, they will be comfortable selling off assets to raise the extra funds which may be needed.

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