The outcry from unions that Ofgem are undermining DB plans has to be put in context.

The issue is really about who is responsible for sorting out the mess that the Network Operators (eg the energy suppliers) have got into with their pension schemes.

Under the current regime, the cost of operating and funding the DB plans of the Network Operators – like Electricite de France has been passed on to the distributors- companies like Centrica (British Gas)

Ofgem’s concern “has been that our existing approach may not adequately place the same incentives on NWOs that are faced by other regulated and unregulated private sector companies to manage pension costs”.

Too right! The NWOs have been getting a “free ride” at the expense of the distributors and the distributors have been the fall guys- either absorbing the pension costs of their suppliers or getting beaten up for passing these costs on to us customers.

The NWOs have had no incentive to keep their costs on and to this day run pension schemes that would otherwise beyond their means- knowing full well that they can pass on their costs and hide behind the distributors.

In a way this an even bigger scam than the Local Govenment Pension Scheme. At least with the LGPS we know what proportion of our council tax bills go to paying council workers pensions. Do we have any idea of the proportion of our gas bills which is being used to fund the pensions of the NWOs?

Ofgem are absolutely right to stop this nonsense. Commercial organisations need to be accountable for their own staff costs and not be allowed to pass them through to distributors and consumers in this manner.

The unions need to be reminded that the cost of energy increases falls hardest on the poorest members of society and in defending the “legal right” of a group of companies not to manage their pension costs, they are condemning the poorest in society to greater hardship.