Consumer bodies demand lower home power bills

INDUSTRY watchdogs have called for a cut in electricity bills for 20 million households. The chairmen of the 14 regional Electricity Consumers' Committees said that the electricity companies had enjoyed large profit increases in spite of the recession and should give domestic customers a better deal.

The committees, set up under the 1989 Electricity Act, are independent of the regulator, Offer. But they are allowed direct access to Stephen Littlechild, the director-general of Offer, who is reviewing the current electricity price caps.

Basil Weedon, a spokesman for the committees, said: 'Customers should not see yet another increase in prices next spring, not even one that is less than inflation. They should be given a reduction in real monetary terms.'

He said that only then would people begin to feel that they had benefited at all from electricity privatisation.

The committees said that the regional supply companies still operated as monopoly suppliers of essential services as far as most customers were concerned.

In April, the regional electricity supply companies increased charges by an average of 2 per cent. But the charges would have gone up by a greater amount in many cases had it not been for pressure for moderation from Professor Littlechild.

He is expected to ask some companies to make price reductions because they overestimated inflation for the year when they set the original price increases.

Professor Littlechild has already expressed concern about the companies' practice of making forecasts of October inflation when they set price caps. He said that, in future, historic inflation figures should be used.

The regional companies cannot increase overall prices to domestic customers by more than the retail price index at present. This is expected to change when new supply price caps are introduced in April 1994.

If the companies fail to agree to the new caps, they will be referred to the Monopolies and Mergers Commission. The consensus is that Professor Littlechild wants a price system that will favour consumers more than that set by the Government before the electricity industry was privatised.