Ofgem says it's good news for customers - what's the real story?

Ofgem's plans affect the companies that distribute power to British homes. Photo: Andrew Milligan/PA Wire/Press Association Images

Energy officials claim they have good news for customers - what's the real story?

This isn't the part of your electricity bill going to big suppliers like British Gas and EDF.

It's going to distribution companies , that own the pylons and wires.

Whilst you can switch energy supplier - you cant switch away from the power lines attached to your home. In other words, these firms have a monopoly.

It's been announced today that the cost of getting power will be £6 per month on average for bill payers - a reduction of £1 a month.

Officials say it’s £2.1 billion in savings overall.

Ofgem chief Dermot Nolan said the measures would help reduce customers' bills. Credit: ITV News

Has energy regulator Ofgem been tough enough on the distribution companies?

When I spoke to chief executive Dermot Nolan, he claimed it was a good deal which drives down prices and gets better services.

However, it looks puny in context - average bills are now around £1,300 a year..and he's talking about just 25p a week off.

His office has confirmed to me that despite efforts by Ofgem, these distribution costs have gone up 41% since 2007.

These firms have no competition, so it has been argued that investing in them is like having money in the bank.

Yet Ofgem tells me it is allowing them a 3.8% return - far more than you or I would get from a bank.