Centrica PLC (LON:CNA), SSE PLC (LON:SSE) and National Grid PLC (LON:NG. will issue lower returns to investors in future as the electricity regulator tightens distribution price controls.
Shareholders will receive dividends based on financial market conditions, while customer prices will be based on competition rather than monopoly, regulator Ofcom said.
READ: Centrica takes a blow to sale plans with latest drill result
Ofgem on Tuesday confirmed the new framework it will use to set the next price control for electricity distribution networks to be enforced from April 2023.
The regulator said it will enable companies to operate a safe and resilient network while contributing to a net zero economy at a low cost to consumers.
“Electricity distribution networks will be crucial to making this transition to a smarter, net zero emissions economy,” Cathryn Scott, acting executive director for systems and networks at Ofgem, said in a release.
“Ofgem’s stable and predictable regulatory regime will allow companies to attract the investment they need to go further in decarbonising the system whilst saving consumers money by keeping returns as low as possible.”
Shares in British Gas owner Centrica dipped 2% to 88.24p on Tuesday morning, while those in SSE were up slightly at 1,466p.