Below you will find an example breakdown of the RIIO-ED1 price control model for electricity distribution. If you have made it to this page without previous knowledge of Ofgem's RIIO Model, you can click here to view all the information you will need.
This example has been made based on tariff information provided by Npower's 'Feel Good Fix August 2018 v2' for the Dundee area.
Tariff: Npower's 'Feel Good Fix August 2018 v2'
Example dates: December 1st 2016 - December 31st 2016
Amount of days: 31
Amount of electricity units used: 270 kWh
RIIO-ED1 electricity rate: 16%
Unit rate: 15.3405p per kWh
Standing charge: 18.6375p per day
Usage price: 15.3405p x 270 kWh = £41.41935
Standing charge price: 18.6375p x 31 days = £5.777625
Subtotal = £47.19
6975 (rounded to two decimal points)
VAT (5%) = £2.36
Total = £49.55 per month
From this point we can work out the amount of money that will be taken from the bill and given to the electricity distribution company by taking 16% from the subtotal.
Electricity distribution cost: £7.5504
Although this isn't a great deal of money, it really does add up when we take into consideration the sheer amount of customers the the electricity distribution companies are supplying to. If we take UK Power Networks for example, who provide to around 8.1 million customers, we can see that if theoretically each of the 8.1 million customers consumed equal to this example, UK Power Networks would receive £61,158,240 per month.