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<p>Electricity distribution network charges vary by region and reflect the costs of
running the network in that area and the number of consumers that those costs are
spread over. Moving away from this ‘cost-reflective’ approach would weaken the local
accountability of the network operator in ensuring expenditure is fully justified,
in turn weakening downward pressures on network costs overall. In addition, a national
price for electricity distribution would mean lower network charges in some areas,
but increases in others. There are fuel poor consumers throughout GB, including in
the areas that could be expected to see higher bills as a result of such a change.</p><p>Any
decision on whether to pursue this further could therefore only sensibly be considered
on the basis of robust and evidence-based analysis<em>. </em>Ofgem is currently working
to inform the issue, and the Government will consider its analysis carefully. It will
also be important to take full account of the final conclusions of the energy market
investigation which is currently being undertaken by the Competition and Markets Authority.
Its provisional findings favour more locational transmission pricing.</p><p>To help
protect domestic and business consumers in the North of Scotland specifically, Government
has already introduced the Hydro Benefit Replacement Scheme. It provides an annual
assistance amount of over £50m to consumers in the North of Scotland. The cost of
providing this discount is recovered from consumers across the whole of Great Britain.</p><p>
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