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National Grid : Western Power Distribution (South West) plc Annual Report and Accounts 2021/22

07/26/2022 EDT

Registered Number: 02366894



For the year ended 31 March 2022

Western Power Distribution (South West) plc



Strategic report


Corporate governance statement


Section 172 statement


Directors' report


Directors' responsibilities statement


Independent auditor's report to the members of

Western Power Distribution (South West) plc


Financial statements:

Profit and loss account


Statement of comprehensive income


Statement of changes in equity


Balance sheet


Statement of cash flows


Notes to the financial statements


Strategic report

For the year ended 31 March 2022

The directors present their annual report and the audited financial statements of Western Power Distribution (South West) plc (the "Company" or "WPD South West"), company number 02366894, for the year ended 31 March 2022.


WPD South West is owned by Western Power Distribution plc ("WPD plc"), which is a public limited company registered in England and Wales. On 14 June 2021 PPL Corporation ("PPL") completed the sale transaction of its UK investment in the WPD Group to National Grid Plc ("National Grid"). On completion of the sale the ultimate controlling parent of the WPD Group is National Grid Plc, registered in England and Wales. National Grid is an energy company operating in the UK and United States of America.

Business model

WPD South West is an electricity Distribution Network Operator ("DNO") delivering electricity to approximately 1.6 million (2021: 1.6 million) customers over an area of 14,400 square kilometres in the South West of England and employing 1,545 (2021: 1,516) staff.

Our 1.6 million customers are registered with licensed electricity suppliers who in turn pay WPD South West for distributing electricity across its network. Our costs are regulated and based on an agreed allowance by the Office of Gas and Electricity Markets ("Ofgem"); on average WPD customers pay £98.85 (2021: £95.81 per annum) for electricity distribution costs.

Our main responsibilities are:

WPD South West's network comprises approximately 28,000 km (2021: 28,000 km) of overhead lines, 24,000 km (2021: 23,000 km) of underground cable and

53,000 (2021: 53,000) transformers. In 2021/22 WPD South West distributed 2,476 (2021: 2,615) megawatts of electricity.

We maintain our network assets to ensure safe and reliable distribution of electricity to homes and businesses across our four regions.

Group background

Western Power Distribution plc is the parent of a group ("WPD Group" or "WPD" or "the Group") whose principal operating activity is conducted by the four DNOs; Western Power Distribution (South West) plc ("WPD South West"), Western Power Distribution (South Wales) plc ("WPD South Wales"), Western Power Distribution (East Midlands) plc ("WPD East Midlands"), and Western Power Distribution (West Midlands) plc ("WPD West Midlands"). Where appropriate the four DNOs share engineering control and other systems.

Western Power Distribution (South West) plc


Strategic report (continued)

For the year ended 31 March 2022

Group background (continued)

In addition to the DNOs, the Group also consists of a number of other smaller subsidiaries including WPD Telecoms Limited, Western Power Generation Limited and South Western Helicopters Limited. The primary purpose of these businesses is to support the DNOs and network related activities of the Group. The Group also owns property companies to facilitate the management of non-network and investment properties of the Group.


The DNOS are natural monopolies and to ensure value for money for consumers are regulated by the Gas and Electricity Markets Authority, which operates through Ofgem. The operations are regulated under the distribution licence which sets the requirements that the Company needs to deliver for its customers.

The regulatory framework is based on sustainable network regulation, known as the "RIIO" model where Revenues=Incentives+Innovation+Outputs. Under the RIIO model there is an emphasis on companies playing a full role in developing a more sustainable energy sector and delivering value for money network services for customers. A key feature of the RIIO model is that the expected outputs delivered by network companies is influenced by its stakeholders through extensive engagement.

Ofgem regulates how much revenue we can earn by setting an allowance over the price control period. In addition to the base level of revenue which the DNOs are allowed to earn, there are incentives to innovate and deliver various outputs relating to customer service, network performance, the environment, connections and efficiency. The achievement of targets in relation to these activities can result in rewards or penalties.

From 1 April 2015, Ofgem set an eight year electricity price control (known as RIIO-ED1). WPD Group submitted an outputs based business plan for the RIIO-ED1 period (2015-2023), which was accepted by Ofgem as "well justified" and could therefore "fast-track" all four WPD licensed areas; the only DNO Group to be fast tracked. WPD's modified licences took effect from 1 April 2015.

Our RIIO-ED1 business plan is available at the link below: https://yourpowerfuture.westernpower.co.uk/our-future-business-plan/our-riioed1-business-plan

Looking to the future RIIO-ED2, covering the period April 2023 to March 2028, is the second price control to be set under the RIIO model. The first draft of our RIIO-ED2 business plan was submitted to Ofgem's challenge group on 1 July 2021 and the final submission was made on 1 December 2021. Ofgem's draft determinations were published in June 2022 with final determinations due in winter 2022. As a result of the Government legislating for net zero carbon by 2050, DNOs will be at the forefront of its delivery enabling the transition to a smart, flexible, low cost and low carbon energy system for all consumers and network users.

Our business plan was co-created with our stakeholders following an enhanced and robust approach to stakeholder engagement and outlines the network investment we propose to deliver for the 5 year period, how much it will cost and the benefits to customers and stakeholders. For details refer to the "Future developments" section below.

Western Power Distribution (South West) plc


Strategic report (continued)

For the year ended 31 March 2022

Purpose, strategy and goals

Our purpose is to deliver exceptional service and support environmental and social well-being for the communities we serve through our commitment to deliver: "Power for life, Power for future generations".

We will deliver a safe and reliable electricity supply at an affordable cost for all our customers, using local staff to deliver local services.

Our strategic direction is essential to achieving our purpose and entails providing excellent network and customer service, delivering our RIIO-ED1 commitments by investing our allowances efficiently, adapting to stakeholder needs and laying the foundation for delivery of the outputs within RIIO-ED2. Our focus is to achieve the best possible positive outcomes for our customers by utilising innovative solutions and smarter working practices to drive efficiency in all we do.

Within the RIIO-ED1 business plan we have 76 commitments pertaining to safety, reliability, environment, connections, customer satisfaction and social obligations. Aligned directly to our stated business plan commitments are our six key goals that underpin our purpose.


Safety is the single highest priority at WPD. Our objective is simple: zero accidents and no adverse impact on the public, employees or contractors. WPD South West continuously promotes safe working practices within the Company as well as engaging with stakeholder groups such as school children, land owners and construction operators through activities on safety awareness and education sessions as well as distributing safety related information.

We operate and maintain the electricity distribution network in line with strict policies in order to avoid our network posing a safety risk to the public and our staff. We hold ourselves and our contractors accountable for safe working behaviours and we work in partnership with our employees and trade unions to ensure an excellent safety culture within the Company. All staff participate in safety training programmes appropriate for the activities they carry out, health and safety is top of the agenda at team meetings. Staff are empowered to stop any job believed to be unsafe. Employee accidents and near misses are reported with prompt and thorough investigations to identify lessons learned in order to avoid repeated future incidents.

WPD's safety management system is compliant with ISO 45001 standard for management systems of occupational health and safety and has been externally accredited by National Quality Assurance ("NQA") in June 2021.

Our detailed safety policy can be found at: https://www.westernpower.co.uk/customers-and-community/health-safety

Network performance & reliability

WPD South West is committed to providing a secure, reliable and continuous network connection to its customers. Our network is available 99.995% of the time. We not only look at the physical security aspects of the network but also at preventing any cyber breach incidents. We recognise that our information systems and electricity networks are critical and valuable assets that must be protected and thus are focused on maintaining a robust system of cyber security that enables business continuity, minimises operational risk and preserves individual data privacy. We are resilient, reliable and results-orientated, focusing on the long term, understanding that taking shortcuts for short term performance is counter-productive.

Western Power Distribution (South West) plc



National Grid plc published this content on 26 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 August 2022 14:31:07 UTC.

© Publicnow 2022
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