Electricity regulator to cut prices

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The Independent Online
PROFESSOR Stephen Littlechild, the electricity regulator, will today announce a one-off price cut on 1 April 1995 of between 15 per cent and 20 per cent.

His report will also set a limit on electricity distribution prices of inflation minus two percentage points, to take effect from the same date. This compares with inflation plus about 1 per cent under the present controls.

Prof Littlechild, director general of the Office of Electricity Regulation (Offer), predicts savings of pounds 70- pounds 90 over five years for the average home.

The price changes will be of less benefit to households than consumer groups had hoped, as distribution accounts for only one quarter of domestic electricity bills.

Last week, the chairmen of the 14 electricity consumers committees set up when the industry industry was privatised, said price reductions should offset the cost of inflation on domestic fuel bills.

The impact on the 12 regional electricity companies could be significant, as distribution counts for most of their profits.

However, City analysts say the electricity companies could still increase dividends in real terms by up to six per cent annually.