Energy prices are something we are all concerned about, particularly in these difficult economic times. Now more than ever we have to make sure our distribution customers are getting the best possible value for money.
The cost of distributing electricity makes up around 16% of an average household bill, increasing to around 25% if you include transmission and metering costs. As a distribution network operator we have an important role to play to ensure the part of a customers energy bill we can control is kept as low as possible.
We have always had a proud reputation as being recognised as the most efficient network operator in GB, and we continue to focus on efficiency, along with innovation and service, in our future Business Plan recently submitted to our Regulator, Ofgem.
Our Business Plan sets out detailed proposals for the price control period from 1 April 2015 to 31 March 2023, known as RIIO-ED1. At the moment Ofgem are considering our plan and will publish its initial assessment later this month. Improving the service our customers receive is at the core of our Business Plan, and this is captured in our twelve commitments for RIIO-ED1.
Our twelfth commitment is that by only spending what we need to in the years ahead we can reduce our part of the electricity bill by 10% in 2015 and have only inflationary increases thereafter.
During the past month, a number of suppliers have cited high distribution costs as one of the reasons for increasing their tariffs. This makes us all the more aware of the need to focus on efficiency, in particular for the north of Scotland network which we own and operate.
Distribution costs are higher in the north of Scotland than elsewhere in GB because our network covers a large geographic area and there are fewer homes with connections. This makes it more expensive for electricity suppliers to use our system and the costs are ultimately passed on to customers.
However, when Ofgem examined this in 2009 it recognised that the most efficient costs for maintaining and repairing networks was in our north of Scotland network (which actually operates for 30% less than the industry average). So we feel we do deliver exceptional value for money in very challenging conditions.
Importantly, we remain even more committed to doing even more for less in the future. Feedback from 97% of over 3,000 stakeholders we have spoken to so far agree with us.