Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, what recent discussions he has had with Ofgem on ensuring that consumers are treated fairly in relation to historic overpayments to energy network operators; and whether he has considered options for returning any such overpayments to bill payers.

The unexpected inflation shock of 2022-23 increased equity value for network companies due to fixed-rate debt financing. Following a public consultation, Ofgem took action to adjust how it regulates network company investment, deliverables and returns, so this cannot happen again going forward.

Ofgem considered reclaiming previous excess profits but decided against this to avoid raising the cost of capital and costs for consumers. Ofgem has made clear that it expects network companies to use any inflation benefit to accelerate network upgrades and find additional ways to support consumers struggling with bills.