Electricity bills to rise to pay for upgrades

Electricity bills will rise to fund upgrades to regional distribution networks, the energy watchdog has said today.

Ofgem, the UK energy regulator, has also warned energy companies that household gas bills must benefit from a fall in wholesale prices.

The regulator said electricity bills would rise by an extra £4.30 a year on average, to ensure 'householders will get better customer service, improved reliability and a greener electricity supply'. The average bill paid per household on electricity is £445 a year.

Ofgem also said that investment in the UK's electricity infrastructure would rise by 40 per cent, to £7.2 billion, compared to the last five years, with £500 million set aside for the low carbon energy fund. The investment figure is eight per cent lower than companies had expected.

Ofgem chairman Lord Mogg said: 'This fund breaks new ground in regulation. Its objective is to encourage companies to be more innovative with new technologies and commercial arrangements. This will allow companies to play a full part in combating climate change.'

Ofgem also decided to 'set a 4.7 per cent actual weighted average cost of capital (using a pre-tax cost of debt and a post-tax cost of equity)', which has been criticised for being 'significantly below all comparators'. Southern and Scottish Energy said: 'Moreover, these were all set before the reassessment of risk and the cost and availability of finance that has characterised global financial markets in the last 18 months.

'It is also significantly below the level of return proposed by Ofwat for the water and sewerage industry last month. Unlike that review, Ofgem's final proposals represent the first time that electricity distribution companies have had any firm indication of the allowed cost of capital.'

The regulator's chief executive Alistair Buchanan said: 'Our proposals are tough on inefficiency and poor service but are fair in allowing the companies to invest to replace ageing network assets and in improving the environment. The controls provide great opportunities for companies which are more efficient and excel at providing what their customers want - but they will penalise poor performers.

'We have listened to consumers' expectations of top quality service, reliability, fair prices and environmental improvement for today and for the future.'

England v Ukraine to be 'internet only'

England's World Cup qualifier against Ukraine in Kiev on Saturday evening will be screened exclusively live over the internet so that it is unavailable to TV viewers.

One-off subscription service Kentaro has secured the rights to the game, and it will cost any potential viewers at least £4.99 to watch the match.

The cost could rise to anything up to £11.99 if subscribers wait until Saturday to sign up - the cheaper price is only available until Wednesday and there are a maximum of one million subscribers.

It is the first time ever that a UK audience will be unable to watch the match live on TV.

Chief executive of Kentaro Philipp Grothe said: 'We have spoken to every traditional UK broadcaster and currently have no offer on the table.

'We therefore feel the internet delivers the most viable option to deliver an important England game directly to the fans.

'It will be the first time in history that an England game has had an exclusive web broadcast.'

Despite the match being effectively a dead rubber for the Three Lions, after they qualified with two games to spare courtesy of an eighth straight win in the campaign over Croatia last time out, the move has angered many fans.

'It's a joke,' said England supporter Richard James from London.

'Who's going to spend three hours of their Saturday evening watching a small screen at home?'

However, others have hailed the move as forcing people to embrace the digital age in new ways.

Utilities analyst Daniel Barnes said: 'It's a great step forward for technology - it's just a shame it's a match no one wants to watch, which is why no TV broadcasters wanted to splash out for the rights.

'But it could be a good opportunity to work out how to connect your computer to your widescreen TV for the first time.'

Previous England internationals have also been screened by Kentaro, and the final game of the 2010 World Cup qualifying campaign against Belrus will also be carried by the web-based broadcaster.

However, that match will also be shown by terrestrial TV channel ITV1. Bankrupt broadcaster Setanta had held the rights to all England away internationals but it went bust during the summer.