Financial rewards

By running our network in an efficient way, we can save money as well as pass some of this back to our customers, by lowering the distribution element of their bills.

Under the terms of our RIIO contract with Ofgem, we receive financial rewards for good performance in key areas – or penalties for falling short.

Historically, NGN has been the most cost-effective gas distribution network in the UK, and we continued to make every penny count in 2015/16. Our efficiencies are allowing us to reinvest in our business to continue to modernise our network and deliver the high standards of service our customers deserve.

By running our network in an efficient way in 2015/16 we saved £35m against our allowed spend.  Over £12 million of these savings will be passed back to customers through the energy suppliers, lowering the distribution element of their bills.  The potential impact will be seen from 2017/18.

By meeting, and often exceeding many of our key regulatory targets, we generated additional financial rewards in 2015/16.

Rewards included:

  • £2.1 million for great customer service. We exceeded all our customer satisfaction targets for 2015/16, and handled complaints speedily and efficiently.
  • £3.5 million for beating our pipe leakage targets for the year. Beating the leaks is important for a smooth, safe service, and also prevents the build-up of harmful greenhouse gases.
  •  £3.2 million for effectively managing the flow of gas through our network to meet demand.
  • £1.2 million for our work with stakeholders to deliver shared goals. This award was made by Ofgem in recognition of our stakeholder engagement activities over the past year.
  • Zero penalties! By meeting our exceeding all our key regulatory targets, we incurred no financial penalties in 2015/16.