All Distribution Network Operators (DNOs) including Northern Powergrid are regulated by the Office of the Gas and Electricity Markets (Ofgem).
Electricity distribution networks are monopolies because there is only one owner / operator for each area. Ofgem administers a price control regime that ensures that efficient distributors can earn a fair return after capital and operating costs whilst limiting the amounts that customers can be charged. Price controls are generally set for five year periods and the current price control runs from 1 April 2010 to 31 March 2015.
Quality of service
Ofgem also monitors the quality of service that DNOs offer customers. This includes how often customers have power cuts, how quickly electricity supplies are restored following such cuts and the quality of communication with customers and other parties. There are two main types of quality of service measures:
- Guaranteed standards of performance which provide protection to individual customers.
- Outputs measures which are annual performance indicators for specific service areas.
Electricity Distribution Customer Service Reward
Ofgem introduced the Electricity Distribution Customer Service Reward to recognise and reward distribution companies that demonstrate best practice for consumers in areas that cannot be easily measured or incentivised. Since the inception of the scheme in 2006, Northern Powergrid has been recognised for its performance in relation to priority care, wider communications and corporate social responsibility.