Our electricity distribution business is the UK's second largest, distributing electricity to 4.9 million homes and businesses across central England through a 133,000 km network of overhead lines and underground cables.

Electricity Distributed (TWh)

	2005	2006	2007
Residential and SME	31.3	31.2	30.4
Industrial and Commercial	26.1	25.9	25.6

SME = Small and Medium sized enterprises

A secure and reliable service

More than 99% of our distribution business customers are homes and small businesses, but the remaining 0.4% are large businesses which consume around 46% of the total electricity we distribute. The amount of electricity we need to send across our network depends on a number of general factors, like customer numbers and the weather, but it is also affected by more specific influences like how many customers are changing the way they use energy, more localised generation and the effects of price increases.

Over the last few years, the volumes of electricity weâ€â„¢ve distributed have been lower than before, partly due to milder winters but mostly as a result of sharp rises in retail electricity prices. Whilst larger (more energy intensive) customers may well change their demand as a response to price, domestic users were not believed to behave according to this â€Ëœprice elasticityâ€â„¢. However, over the last few years we have noticed a marked reduction in demand in both the domestic market and the larger business market. It's been quite clear that this has been a direct response to retail price movements. For larger customers, it is also quite possible that part of their response to retail price rises was to become more energy efficient, meaning that their energy-saving investments over the last few years will not be lost even if retail prices reduce again. For domestic customers, it is too early to say whether this could be the case.

Inevitably, when electricity is transported around the network, some is lost. Our network losses stand at around 5.1% of units distributed and are amongst the lowest in the UK.

Estimated Network losses as % of electricity distributed

2005	2006	2007
5.2	5.2	5.1

Prior year figures updated to ensure backward comparability