Eastern faces watchdog attack

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The Independent Online

Industrial Correspondent

Offer, the electricity watchdog, launched an attack on Eastern Electricity for its plummeting performance in meeting standards of service in spite of an improvement in the industry as a whole. The criticism comes at a sensitive time for Eastern, which is awaiting Government clearance for a pounds 2.5bn agreed take-over bid by Hanson.

The latest Offer report on customer service shows that failures to meet guaranteed standards more than doubled last year, to 1,243. The failures accounted for more than one-fifth of the total incurred by the 12 regional electricity companies in England and Wales as well as Scottish Power and Scottish Hydro-Electric.

The companies must pay customers between pounds 20 and pounds 100 for each failure to meet an agreed set of 10 standards, which range from failure to restore electricity supply within a certain time after a fault, topromptly answering queries and complaints. Offer said that Eastern also failed to meet the requirements on telling customers when they were entitled to payments. Professor Stephen Littlechild, director general of Offer, said he would be calling for an explanation.

For the industry as a whole the figure dropped by almost one-third to 5,410. And the number of complaints made to Offer also dropped by 11 per cent to 9,726 last year. A spokesman for the regulator declined to comment on the bid for the company by Hanson, saying that the standards hold irrespective of who has the operating licence.

The report comes as the industry braces itself today for a Government announcement on whether it will refer to the Monopolies and Mergers Commission the proposed pounds 1.1bn takeover of South Western Electricity by Southern Electric International of the US.

Ian Lang, President of the Board of Trade, may at the same time give his views on the Hanson offer. Potential predators, including utilities in the US and Europe, will be monitoring the situation.

Mr Lang has also to rule on the one hostile offer - a proposed pounds 1bn takeover of Manweb by Scottish Power. Yesterday it emerged that Scottish Power now owns or has acceptances in respect of 19.9 per cent of Manweb from 14,912 shareholders for its pounds 9.15-per-share offer.

Manweb dismissed the level of acceptances as "derisory" and said it showed that the bid undervalues the company. Scottish Power rejected Manweb's criticism as "ludicrous" at this stage. The company, which has extended the offer until 15 September, said that the cash-plus-shares alternative is now worth pounds 9.75 per share compared with Manweb's price last night of pounds 8.78, a fall of 10p on the day.