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Energy & bills · Networks ownership model · Great Britain · 2025-26

Would public ownership of the electricity networks cut bills?

It could lower the cost of financing them — about £1.6bn a year on Ofgem’s own figures if shareholders were bought out at book value — but that rests on the state borrowing at Ofgem’s risk-free rate, adds about £82.3bn to public debt, and moves the risk of overruns to taxpayers. The answer swings with the assumptions.

Evidence last reviewed 3 October 2026

This is a model, not a forecast or a recommendation. Its inputs are the companies’ regulatory returns to Ofgem and Ofgem’s price-control decisions; the three assumptions that decide the answer are yours to change. It covers electricity transmission and distribution in Great Britain only — not gas networks, generation or supply.

1. What would be bought

How big are the electricity networks, and how are they financed?

GB electricity networks have a regulated asset value of £82.3bn, 55% financed by net debt

Closing regulatory asset value (RAV) of each licensee group at 31 March 2026, £m in cash terms, nine groups: six distribution and three transmission.

Great Britain (England, Scotland, Wales) · Year to 31 March 2026
  • National Grid Electricity Transmission£24.1bn (29%)
  • National Grid Electricity Distribution£13.1bn (16%)
  • UK Power Networks£9.7bn (12%)
  • SSEN Transmission£9.0bn (11%)
  • SSEN Distribution£6.7bn (8%)
  • SP Energy Networks (distribution)£6.3bn (8%)
  • Northern Powergrid£5.3bn (6%)
  • SP Transmission£4.8bn (6%)
  • Electricity North West£3.2bn (4%)
The asset value is the regulator’s measure of what customers still owe the companies for past investment; customers pay a return on it and pay it down over time. Of the £82.3bn total, £37.9bn is transmission and £44.4bn distribution. Net debt is 55% of it, close to Ofgem’s assumed 55–60%, so the companies’ shareholders own a book equity of about £37.2bn. The limit: these are regulatory values reported by the companies themselves, not market prices for the businesses.

Great Britain (England, Scotland, Wales) · Year to 31 March 2026 · Regulatory returns prepared by the companies for Ofgem; not official statistics

Show the workings — GB electricity networks have a regulated asset value of £82.3bn, 55% financed by net debt
Geography:
Great Britain (England, Scotland, Wales) — All 14 electricity distribution licences and 3 electricity transmission licences
Measure:
£ million, nominal (2025-26 prices)
Period:
Year to 31 March 2026
Status:
Regulatory returns prepared by the companies for Ofgem; not official statistics
Calculation:
Sum of each group’s licences from the companies’ own RFPR workbooks (sheets R6, R7, R9). Nominal RAV is used so that it can be set against nominal net debt.
Compare with:
Net debt £45.1bn; dividends paid £1.4bn in 2025-26
Not included / breaks:
Excludes gas transmission and distribution networks, offshore transmission (OFTOs), independent network operators and interconnectors. Group dividends paid outside the licensee are not shown.

Source: National Grid Electricity Distribution, Regulatory Financial Performance Report 2025-26, sheets R6 row 46, R7 rows 24 and 32, R9 row 16, column 2025/26 (released 30 September 2026).

View the data as a table
GroupSectorRAV £mNet debt £mNet debt ÷ RAVDividends 2025-26 £m
National Grid Electricity Transmissiontransmission24116.612728.552.8%400.0
National Grid Electricity Distributiondistribution13090.26699.351.2%283.5
UK Power Networksdistribution9693.75558.857.3%308.6
SSEN Transmissiontransmission9020.15015.455.6%0.0
SSEN Distributiondistribution6732.94012.159.6%65.0
SP Energy Networks (distribution)distribution6333.23798.660.0%138.8
Northern Powergriddistribution5326.73024.556.8%60.0
SP Transmissiontransmission4788.32813.758.8%100.0
Electricity North Westdistribution3217.41493.846.4%19.0
Total82319.145144.754.8%1374.9

Scroll the table sideways to see every column.

2. Where a saving would come from

Network charges — £417 of a typical dual-fuel bill in the current cap, gas and electricity together — pay the companies’ running costs, the gradual repayment of the asset value, and a return on that asset value. Ofgem sets the return at what it judges investors and lenders need: for distribution in 2023–28 a cost of equity of 5.23% and an overall weighted cost of capital of 3.90–3.93% above inflation; for transmission in 2026–31, 5.70% on equity and 4.46–4.67% overall. Weighted by asset value that is 4.20%, or about £3.5bn a year.

The state can usually borrow for less. Ofgem’s own risk-free rate for RIIO-3 — the yield on 20-year index-linked government bonds, converted to the same inflation measure — is 2.30%. Financing the same assets at that rate, the gap is where a saving would come from. Running costs and repayments would still have to be paid, whoever owns the companies.

Dividends are not an extra saving on top. They are paid out of the allowed return. The licensees paid £1.4bn relating to their regulated businesses in 2025-26. Net debt of £45.1bn — 55% of asset value — is the larger financing flow, and the companies’ bonds would have to be taken on or refinanced.

Do the companies earn more than they are allowed?

Eight of 9 network groups earned more than their allowed return on equity in 2024-25

Return on regulatory equity (RoRE), including financing and tax performance, at Ofgem’s notional gearing (filled dot), against the allowed return on equity (open dot), 2024-25, %.

Great Britain · 2024-25 (year to 31 March 2025)
Achieved return on equity, 2024-25Allowed return on equity
  • SP Energy Networks (distribution)8.0%
  • National Grid Electricity Transmission7.9%
  • National Grid Electricity Distribution7.6%
  • Northern Powergrid7.5%
  • Electricity North West7.4%
  • SSEN Transmission7.2%
  • UK Power Networks7.1%
  • SSEN Distribution6.5%
  • SP Transmission5.2%
Price controls let companies keep part of any underspend against their allowances and earn incentive rewards, so achieved returns can sit above the allowed rate. In 2024-25 they did for 8 of 9 groups (not SP Transmission), by 0.9 to 2.7 percentage points. Some of that comes from financing — borrowing more cheaply than Ofgem assumed. The limit: one year only, and outperformance can reflect genuine efficiency that customers share in later price controls.

Great Britain · 2024-25 (year to 31 March 2025) · Regulatory data compiled by Ofgem from company returns

Show the workings — Eight of 9 network groups earned more than their allowed return on equity in 2024-25
Geography:
Great Britain — Electricity transmission and distribution licensee groups
Measure:
% a year, CPIH-real
Period:
2024-25 (year to 31 March 2025)
Status:
Regulatory data compiled by Ofgem from company returns
Calculation:
As published by Ofgem, one sheet per licensee group.
Compare with:
Allowed equity return after indexation: 5.20% (transmission), 5.59% (distribution)
Not included / breaks:
Notional gearing, not each company’s actual gearing; one year only. 2025-26 RoRE was not yet summarised by Ofgem when this page was built.

Source: Ofgem, RIIO-2 Supporting Data File RFPR 2024-25, one sheet per licensee group (released 13 February 2026).

View the data as a table
GroupRoRE 2024-25 %Allowed equity return %
SP Energy Networks (distribution)8.05.59
National Grid Electricity Transmission7.95.20
National Grid Electricity Distribution7.65.59
Northern Powergrid7.55.59
Electricity North West7.45.59
SSEN Transmission7.25.20
UK Power Networks7.15.59
SSEN Distribution6.55.59
SP Transmission5.25.20

Achieved returns matter too: 8 of 9 groups earned 0.9–2.7 percentage points above their allowed equity return in 2024-25. The model below uses the allowed return, which understates what shareholders have recently earned; move the slider to test a higher figure.

3. The model

Book equity = asset value £82.3bn − net debt £45.1bn = £37.2bn. A real price would be negotiated or set in legislation; this model does not estimate a market price.
Default 2.30%: Ofgem’s own risk-free rate for RIIO-3 (20-year index-linked gilt yield, September 2025, converted to CPIH-real). Larger borrowing could raise it.
Default 4.20%: Ofgem’s baseline allowed WACC, weighted by asset value (distribution 3.90–3.93%, transmission 4.46–4.67%). Achieved returns have been higher.

Cost to buy out shareholders

£37.2bn

plus £45.1bn of company debt taken on — £82.3bn on the public balance sheet

Annual saving on financing

£1.6bn

£3.5bn return paid now − £1.9bn public financing cost

Per household, at most

£55

if the whole saving reached the bills of 28.2m households. Businesses pay part of network charges, so households would get less.

Real terms, 2025-26 prices. Annual saving = asset value × return customers pay − (net debt + price paid) × government real borrowing cost. A steady state: it ignores the years of transition, the cost of buying out or refinancing existing bonds early, any change in efficiency, corporation tax the companies no longer pay, and cost overruns falling on taxpayers instead of shareholders.

On Ofgem’s own figures — shareholders bought out at book value (£37.2bn), the state borrowing at 2.30% — the annual saving is about £1.6bn, at most £55 per household if all of it reached the bills of 28.2 million households, and less in practice because businesses pay part of network charges. Pay shareholders a premium, or borrow at a higher rate, and it shrinks quickly.

4. What would cut the other way

  • Public debt rises. About £82.3bn would move onto the public balance sheet on the central assumptions, unless ownership were structured to keep it off.
  • Investment still has to be paid for. The networks allowance in the cap has roughly doubled since 2019 and more grid is planned; public ownership would change who finances new investment and at what rate, not whether customers pay for it.
  • Risk moves to taxpayers. Cost overruns and failures would fall on the public purse rather than on shareholders and lenders.
  • The borrowing rate is not fixed. Borrowing tens of billions more could raise the state’s own cost of debt; existing company bonds carry their own rates until they mature or are refinanced.
  • Efficiency is uncertain. Evidence on whether public or private ownership runs networks better is mixed and depends on governance and regulation; this model assumes running costs are unchanged.
  • Part of the system is already public. The National Energy System Operator, which plans and balances the system, has been publicly owned since October 2024; the wires themselves are not.

The same calculation for water is at public ownership of water: a model. Other ways of lowering bills are compared on the energy page.

Sources and methods (13)

Method notes

  • Asset values, net debt and dividends are nominal £m at 31 March 2026 (2025-26 prices), summed across each group’s licences. The companies’ real asset values use different price bases (2020/21 for distribution, 2018/19 for transmission) and are not added together.
  • Allowed returns are Ofgem’s baseline CPIH-real rates from the final determinations; Ofgem indexes the cost of equity and debt each year, so the in-year allowance differs (for 2024-25 Ofgem reports 5.59% on equity for distribution and 5.20% for transmission).
  • Return × nominal asset value gives a real annual return in 2025-26 prices; the government rate is also CPIH-real, so the saving is in 2025-26 prices.
  • Excludes gas networks, offshore transmission owners, independent network operators and interconnectors. The per-household figure is an upper bound: it assumes every pound reaches household bills.