The union had been in dispute with the regulator after an Ofgem consultation paper, Price Control Pension Principles, suggested that electricity companies were running their pension schemes without sufficient care, and passing on unwarranted costs to consumers.

The paper signalled an intention to review the price control principles that allow companies to pass through legitimate pensions costs via the price mechanism.

But a paragraph in the regulator’s latest consultation document published this month describes the existing pension principles as “appropriate” and that they “generally work well.” The statement reverses earlier suggestions that problems existed in the way the pensions were costed and paid for.

Responding, Deputy General Secretary Mike Clancy said: "Prospect welcomes the realisation by Ofgem of what we have said all along – that the Electricity Supply Industry companies manage their pension schemes to the highest standards and there is no evidence that unreasonable costs are passed through to consumers.

“We hope that Ofgem will now focus on the real challenges for consumers and energy policy in ensuring that there are sufficient trained staff to keep the lights on, replace our ageing networks and, most important, do all of this to the highest safety standards."

The latest Ofgem consultation document, Electricity Distribution Price Control Review Policy Paper (REF: 159/08) published on December 5, contains the statement in paragraph 5.40:

"In summary, respondents agreed that the key issues were identified and that our Pension Principles remain appropriate and generally work well. We think it is appropriate to carry out further work to reassure stakeholders and customers that the companies are meeting the principles rather than looking to change the overall principles."