WPD: Answering our critics

Western Power Distribution (WPD) chief executive Phil Swift explains how the company has responded to calls to be radical and ambitious in the second draft of its business plan for the RIIO ED2 price controls beginning in 2023.

Innovative, affordable, efficient – and more ambitious than ever. The second draft of WPD’s business plan – published for stakeholders last week – is all this and more. We’ve been listening intently to our stakeholders, including valuable scrutiny from the Customer Engagement Group, as detailed in Utility Week in February. The latest publication is a robust response to those who wanted to see us be more radical and ambitious.

RIIO ED2 will look very different for our customers as the UK moves rapidly towards a carbon zero future: electricity demand is likely to rise; there will be a further acceleration in renewable, decentralised energy generation; a huge growth in electric vehicles; and substantial changes in the way we heat our homes. It is essential that WPD’s business plan drives that change, seizing on the opportunity to achieve decarbonisation at pace. As CEO, I’m determined to place WPD at the heart of a clean, affordable and fair energy future.

To do so, our business plan was always going to be radically different to that delivered in RIIO ED1. The speed and scale of change reflects the clear feedback we’ve heard from engagement with our broadest ever range of stakeholders. WPD is the only DNO to have published two drafts of our business plan ahead of the first submission to Ofgem’s Challenge Group in July 2021. We’ve done this to offer full transparency and maximise the opportunities for stakeholders to influence our proposals.

We’ve already had a fantastic response. In the last eight weeks alone, we’ve received over 2,200 responses to our first draft, leading to significant changes to our business plan. As a result, we’ve raised the ambition of 60 per cent of our 58 commitments, added four entirely new proposals and improved the measurability of a further 11. This represents a huge shift that will achieve positive outcomes for customers at a time of exciting, revolutionary change in the energy sector.

Some messages from stakeholders have been loud and clear. For example, we’re committing to drive the UK’s wider achievement of net zero, engaging with local authorities to ensure the local energy grid is ready to achieve their regional aspirations – many by as early as 2030. For customers, we’re planning to be able to connect up to 1.5 million electric vehicles and 600,000 heat pumps by 2028. Added to that, we’re making a promise to become a net zero business by 2028 – that’s 22 years ahead of the government target and 15 years earlier than the 2043 goal we initially consulted on in our first draft plan.

More than 9,600 energy users have already had their say on our proposals, with eight months of further engagement to come.  From the outset, our strategy was to co-create our plan with stakeholders in stages, and therefore we always expected the second draft to look materially different to the first – and it is. We assured the Customer Engagement Group that this would be the case and we’ve now delivered.

The second draft publication, which is accompanied by a month-long consultation posing questions on 14 key areas for stakeholders to consider, includes numerous revisions which bolster the pledges from our initial draft.

These include addressing the desire of stakeholders to see us do more to support those experiencing fuel poverty. During ED1, our fuel poverty programme has delivered savings of more than £27 million to customers in need – around ten times more than other DNOs. But stakeholders want us to go even further, so we’ve pledged to increase these savings to an unprecedented £60 million during ED2. With commitments like this, we’re confident we’re rising to the challenge of building a radical, ambitious plan for the future.

We’re also going further to support our communities, including innovations to ensure no-one is left behind as we make the vital shift to a smart energy future. We’re making a new commitment to offer 1.2 million Priority Services Register customers a bespoke, smart energy plan every two years to help them access the benefits of the low carbon transition.

RIIO ED2 will also see the launch of an annual £1 million community support fund, following the success of our ‘In This Together – Community Matters’ fund in 2020, which awarded £1 million to those hardest hit by the Covid-19 pandemic. This will be funded entirely by shareholders.

Maximising our positive impact on the environment is central to our plan. We’re at the forefront of community-led renewable energy and energy flexibility, and we’re already tackling our own carbon footprint by replacing our entire transport fleet with non-carbon vehicles.

We’re committing to achieve all of this while keeping customer bills broadly unchanged, in-line with present day levels.

What’s more, our business plan is still not finished. We’re expecting further valuable responses to our latest consultation, which runs until 25 April 2021. We’re inviting stakeholders to share their views on the second draft plan and to ensure we’re doing everything we can to be as ambitious as possible.

As CEO, my focus is clear – WPD must deliver a safe, smart, resilient, sustainable and affordable energy system that is fit for all our futures and those of generations to come.

Click here to read the second draft of WPD’s business plan.