The UK's energy industry watchdog Ofgem has authorized near to GBP6 billion worth of infrastructure investment for the British energy transportation and distribution networks. However, ultimately, the extra investment will have to be paid for by the consumer.

According to reports, UK gas users face around a GBP10 increase to their bills, while electricity bills will go up by approximately GBP3. The increases will help to pay for a GBP5 billion investment by companies in Britain’s energy transportation networks and a GBP946 million investment in the gas distribution sector.

Ofgem has authorized providers to spend GBP5 billion over the next five years to upgrade the UK transportation system, while gas distributors will be able in inject just under GBP1 billion for the 2007 to 2008 period.

To fund these investments, overall transmission charges to consumers will initially increase by 8% against the current revenue allowances for 2006 to 2007. To reflect rising investment levels, electricity transmission revenues will then increase by a further 2% above the rate of inflation each year thereafter, while gas transmission revenues will increase in line with inflation.

Ofgem chairman Sir John Mogg said: Investment in the backbone of Britain’s gas and electricity networks is vital to maintain high levels of reliability and secure supplies for customers. It also meets the challenge of developing a sustainable policy for the climate change agenda, notably for the connection of low-carbon generation.