City says EDF power gridlock will put London's profits in the dark

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The Independent Online

The City has accused the energy regulator, Ofgem, of holding back London's economic prosperity by not allowing the capital's electricity supplier to spend more to strengthen the grid.

The City has accused the energy regulator, Ofgem, of holding back London's economic prosperity by not allowing the capital's electricity supplier to spend more to strengthen the grid.

The Corporation of London is angry that Ofgem has not increased the target on reducing power cuts for EDF Energy, which owns London Electricity, for the next five years. It says that businesses in the capital will experience more power cuts than other finance centres including Tokyo, Paris and New York.

At the end of November, Ofgem announced the final results of its five-year price review that sets performance targets and the price distributors can charge generators to send electricity down wires. It also set out how much the companies can invest in the distribution network, which the industry says is nearing the end of its life and needs to be replaced.

Over the next five years, London Electricity has been set a target of not allowing customers to lose more than 40.1 minutes in electricity each year. This is an increase from the target for last year of 38 minutes and compares to on average 12 minutes lost for customers in Tokyo, 17 in Paris and four minutes in New York.

The targets outlined in the final ruling represent no improvement on the draft proposals announced by the regulator in September, despite protests from the Corporation, which lobbied the Treasury and the Department of Trade and Industry.

Michael Snyder, the Chairman of the Corporation of London's Policy and Resources Committee, said: "We are disappointed that the regulator is holding back London's economic prosperity by not responding to the needs of the business community.

"A step change in the quality of electricity supply is needed in the capital to lower the current levels of customer minutes lost and customer interruptions. Electricity supply to London's business centre must be made more compatible with other world economic centres."

Ofgem says the targets for London will still be the toughest in the country.

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