The Utility Connections Industry

The Utility Connections industry – a brief introduction.

Following the opening up of the utility supply market, the regulator OFGEM deregulated the utilities connections sector bringing increased competition to new developments. OFGEM is committed to promoting competition within the connections market as a mechanism to benefit customers through increased quality, or decreased prices, or both with the view that natural monopolies inevitably make it more difficult to promote competition.

The gas connections market opened to competition in 1998, followed two years later by the electricity connections market.  Following the advent of competition, a customer seeking a new or modified electricity and/or gas connection can now have the connection assets installed by an independent provider such as Energetics.

Prior to deregulation, getting a new electricity or gas connection were monopoly markets with no choice of suppliers. This market was often criticised by customers for having no choice of suppliers resulting in often high fixed prices and no alternative suppliers who to compare prices or service against. 

For example customers who required a new electrical connection had no option but to procure the required connection through their Regional Electricity Company (REC) or as now named, their regional Distribution Network Operator (DNO). DNOs include Scottish & Southern Energy, Scottish Power and Western Power Distribution. 

For a gas connection, customers could only choose the national gas network operator, at the time British Gas, and for water connections only regional water companies such as Severn Trent could be selected.

Post Competition

Following deregulation, new independent connection providers became established bringing much needed competition to the utility connections sector. Since then the market share of incumbents has changed significantly as more and more customers are experiencing the benefits competition has brought including:

  • Lower prices
  • More flexible payment terms
  • Improved service and timescales
  • One point of contact for multi-utilities

 

Utilities Connections – how they work

Post competition, Independent Connection Providers (ICPs) has been permitted to undertake contestable works as part of the installation of utility networks. Once installed these networks need to be adopted by network asset owner/operators who include the regional gas network operators, the distribution network operators (DNOs) and independent network operators. Independent network operators (e.g. Energetics) are known as Independent Gas Transporters (IGTs) for gas and Independent Distribution Network Operators (IDNOs) for electricity. Installed water networks are nearly always adopted by the relevant regional water authority company.

Typically ICPs install networks to both single and multiple connections such as new build housing estates and commercial developments. These independent networks often cover the last few hundred metres from the point of connection to the incumbent’s (typically the DNO for electricity) network, and is embedded in the local incumbent’s network area. The adoption and operation of the network asset is then undertaken. Once the connection is live, the network asset owner/operator charges the occupier of the property distribution charges for using the networks pipes and cables to deliver energy. These charges are part of the distribution/transportation charges that appear on the chosen supplier’s utility bill and are regulated by Ofgem under separate gas and electricity Relative Price Control regimes.

The Relative Price Control regimes are set to ensure that domestic connected customers to independent networks are the same as those paid by domestic customers connected directly to the incumbent’s (e.g. DNO) network.

 

Energetics’ step into the market and gain industry accreditation

Energetics was established in 2006 and secured OFGEM licences to become an Independent Distribution Network Operator (IDNO) and Independent Gas Transporter (IGT). The company also became accredited for the design and build of electricity networks to DNO industry standards via the Lloyds  National Electricity Registration Scheme (NERS). This scheme is operated on behalf of the UK Distribution Network Operators (DNOs).

Energetics is also accredited under Lloyds’ Gas Industry Registration Scheme (GIRS) for design work associated with the construction of new gas infrastructure operating up to 7 bar pressure.

For water Energetics are also accredited by Lloyds under the Water Industry Registration Scheme (WIRS) on behalf of water utility companies.

 

Frequently Asked Questions

To learn more about the Utility Connections Industry, visit our FAQ’s page for more detailed information.

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