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Wales & West Utilities Staff News

Dear Member,

In this update you will find information regarding the following:-

• OFGEM Electricity Networks Price Review: Pay and Pensions
• OFGEM Responds to UNISON's Concerns -Letter from Alistair Buchanan - OFGEM Chief Executive

OFGEM Electricity Networks Price Review: Pay and Pensions

OFGEM has now published its final proposals on the "Electricity Distribution Price Control Review". This document – available with supporting material on the OFGEM website- sets out the level of charges the companies can make over the next 5 years. The OFGEM press release states that as a result of their proposals the average electricity bill will increase by £4 30 a year to fund the companies capital expenditure to renew and upgrade the distribution system.

Some of the companies have inevitably expressed disappointment with the outcome in terms of the rate of return they will be allowed to earn on their investments. It is too early to say if there will be any adverse consequences for jobs. However OFGEM has written to the unions highlighting the fact that their proposals contain a substantial allowance of £218 million - equivalent to 4500 jobs- for growth and renewal in the electricity companies’ workforce over the next five years.

Pay - The proposals are less helpful on the subject pay and conditions. The document notes that the companies have "typically struck pay deals in the last year that are well above inflation" (as measured by RPI). OFGEM observe that this should “provide some headroom for below inflation price rises in subsequent years to maintain the level of real wages unless there are productivity improvements..." No doubt this will be cited frequently by the companies in 2010 pay talks.

Pensions - On pensions OFGEM has made a number of important decisions and:

· Allowed in full what the companies asked for in pension costs.
· Reduced the incentive rates that the companies will be exposed to on any overspend relative to forecast ongoing pension cost.
· Decided to use the Government Actuary Departments statistics to decide whether to trigger an efficiency review in assessing how companies are managing their pension costs rather than data derived from the Pension Protection Fund.

These are welcome developments but it is certain that the regulator will return to this issue in the next reviews of the transmission and gas distribution price controls.

To obtain a copy of the bulletin please click here [word document]

OFGEM Responds to UNISON's Concerns -Letter from Alistair Buchanan - OFGEM Chief Executive

Mike Jeram - UNISON National Secretary - has received a letter from Alistair Buchanan - OFGEM Chief Executive - summarising the proposals within the Price Review.

To view a copy of the letter please click here [pdf document]

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If you are reading this bulletin and you are not already a member of a trade union then why not apply to join UNISON today. Speak to your local UNISON rep or log on to the UNISON web site www.unison.org.uk and join online

There is no better time to be a member of a recognised Trade Union, only a recognised Trade Union can negotiate on your behalf. By being a member of UNISON you have the full support of your local Workplace Representatives, your Branch Officers and the Regional Full Time Officer.

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Our strength is in our numbers... the more members we have, the stronger we are and the greater our voices can be heard.

Members are reminded that they can contact their local representative to express their views or to forward any questions. Alternatively, please feel free to email us at queries@unisoncymruwalesgas.org.ukuk - other contact methods may also be found at the bottom of this message.

Regards,

Unison Cymru/Wales Gas

Contact us with your queries:

• by email - queries@unisoncymruwalesgas.org.uk
• by speaking with your local UNISON representative - click here
• or online - click here


All communication will be dealt by a UNISON representative
and will be treated confidentially.

In the last update we reported on the following:-

• OFGEM Review of Pension Principles - delegation report
• Third and Final Consultation Document - OFGEM's "minded to" proposals

To find out more about the above, please visit our website or click here

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