Burnham’s energy bill plan could shift power to regions

Network charges add about £120 a year to the average household electricity bill in the North West, £30 more than in London, according to 2023 Ofgem data. Andy Burnham wants to scrap that postcode lottery.

The Greater Manchester mayor has outlined plans to overhaul how household energy bills are calculated, as reported by The Telegraph. His pitch: shift the cost of maintaining the grid away from regions with older infrastructure and towards wealthier, higher-consuming areas. For homeowners in the North West, that could shave tens of pounds off annual bills, but the real prize is how it reshapes the economics of going green.

Who qualifies, and who doesn’t

Burnham’s proposal isn’t a blanket discount. It targets the distribution use-of-system (DUoS) charges, which cover the cost of pipes and wires from the national grid to your street. These vary by region because of historic investment patterns: the North West’s network was built decades ago and costs more to maintain per customer than the newer infrastructure in the South East.

Under the mayor’s plan, the £1.2 billion annual DUoS bill would be recalculated using a formula that accounts for regional income levels and fuel poverty rates. Households in the lowest income decile, roughly those earning under £20,000 a year, could see their standing charges fall by up to 15%. The catch is that wealthier households in the same region might pay slightly more, though Burnham’s office has not published a full impact assessment.

What it costs a typical 3-bed semi

Let’s ground this. A 3-bed semi in Manchester using 3,100 kWh of electricity and 11,500 kWh of gas a year currently pays about £1,570 under the price cap. Network charges account for roughly 18% of that, around £283. If Burnham’s rebalancing cut DUoS by 10% in the North West, that household would save about £28 a year. Not life-changing, but enough to offset the standing charge hike that came in October 2024.

The bigger effect is on heat pump economics. A typical air-source heat pump uses electricity at a rate of 3.5 kWh of heat for every 1 kWh of electricity (a COP of 3.5). At current North West electricity prices of 27p per kWh, heating a home costs roughly £1,080 a year. If Burnham’s plan reduced the per-kWh electricity cost by 2p, plausible if DUoS drops, that same heat pump would cost £1,000 a year. That’s an 8% saving before any grant from the Boiler Upgrade Scheme.

But the plan doesn’t touch gas network charges, which are a separate pot. So households that stick with gas boilers see no benefit. That’s a deliberate design: the mayor wants to incentivise electrification, not subsidise fossil fuels.

What this misses, and what to watch

The elephant in the room is Ofgem. The regulator sets price controls for network companies, and any regional rebalancing would need to fit within the RIIO-ED2 framework, which runs until 2028. Burnham’s proposal would require a formal modification to the electricity distribution licence conditions, a process that typically takes 18 months and involves a public consultation.

Whitehall is also wary. The Department for Energy Security and Net Zero has resisted regional pricing in the past, arguing it complicates the national price cap and could create perverse incentives for energy-intensive industries to relocate. Burnham’s team counters that the current system already penalises the North, and that a fairer structure could boost heat pump uptake in the region, which trails the national average by 12%.

For homeowners, the actionable takeaway is this: don’t wait. The proposal has no legislative timetable. If you’re in the North West and considering a heat pump or solar panels, the Boiler Upgrade Scheme’s £7,500 grant is available now, and solar export tariffs (typically 15p per kWh from Octopus) are independent of regional pricing. Burnham’s plan, if it materialises, will be a bonus, not a reason to delay.