Littlechild calls for break-up of Scottish electricity system

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The Independent Online
THE ELECTRICITY regulator Professor Stephen Littlechild caused outrage north of the border yesterday after calling for the Scottish power transmission system to be split off from the country's two electricity producers.

In a consultation paper outlining his support for separate ownership of electricity supply and distribution businesses, Professor Littlechild said that Scottish Power and Hydro-Electric should be obliged to put the Scottish transmission system and the interconnector to England and Wales into separate ownership. As an interim measure until the legislation was in place, he said their transmission businesses should be placed into separate subsidiaries with their own staff.

The regulator argued that the move would increase competition in electricity generation and supply. But a spokesman for Scottish Power said it would increase costs by several million pounds a year. "Professor Littlechild has taken an extreme position based on a number of misconceptions and we will be writing to him spelling this out and making some points of our own about how competition in Scotland is facilitated."

He also maintained that transmission charges were lower in Scotland than in England, where the system is owned and operated separately by the National Grid.

Separation of electricity distribution - the local wires monopoly - from supply - the actual sale of electricity, was proposed in the Government's Green Paper on utility regulation in March. However, it left open the option of whether this could be achieved by splitting the ownership or simply by issuing separate licences for different parts of the business.

The regulator's preference is for full separation of ownership, although the consultation paper does not spell out how this would be achieved.