Ofgem has unveiled plans to review the 20-year old regime governing the regulation of the gas and electricity networks. The two-year review will examine whether the current approach will continue to deliver customers reliable, well-run networks with good service at reasonable prices amid growing investment challenges faced by the energy networks in the future.

The latest and most wide-ranging review will be undertaken by a separate new team, with its own director who will report to Steve Smith,Managing Director of Ofgem’s Networks Division, and will not report until 2010.They will look at whether companies need to be forced to deliver on climate change goals and not just price.

Alistair Buchannan, Ofgem Chief Executive said in a press statement that the current regulatory regime had delivered much greater efficiency from the network operators with better quality of service, improved reliability and lower costs to consumers but there were wider needs that now needed to be considered. He said companies and capital markets could assume that, because the review will not report until 2010, work for the next price controls for electricity distribution – due to come into play in 2009 - would not be affected and the framework for those price controls would be published shortly.