Power boss warns of more British blackouts if charges are cut back

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The Independent Online

Power cuts caused by storms, such as those last week which left over 300,000 people without electricity, will get worse unless energy companies are allowed to spend more to upgrade the grid. That's the warning from Paul Golby, chief executive of E.ON UK, the group formerly known as Powergen.

Power cuts caused by storms, such as those last week which left over 300,000 people without electricity, will get worse unless energy companies are allowed to spend more to upgrade the grid. That's the warning from Paul Golby, chief executive of E.ON UK, the group formerly known as Powergen.

Last month, energy regulator Ofgem ordered the operators of the distribution net- works that make up the national grid to cut distribution charges over the next five years.

The industry had asked for an increase in the charges - which make up almost a third of the typical household bill - to pay for a £9bn investment programme needed to upgrade their power lines across the country. That is almost double the amount it spent between 2000 and 2005.

However, under Ofgem's draft proposals, companies would only be able to increase their investment by 30 per cent. Most of the networks were built in the 1950s and 1960s and were only meant to last 40 years.

"Unless we're allowed to invest in our networks to make them more robust, then the damage and outages we saw after Wednesday's freak summer storm could become more and more likely as our assets get older and older," Mr Golby told The Independent on Sunday.

"Ofgem and the Government have to recognise that the distribution companies not only need to spend billions of pounds to rewire Britain," he added, "they actually want to spend it."

Unless the regulator allows for increased investment on the networks, they could have to last up to 100 years before their operators can afford to replace them, he claimed. Companies are currently negotiating with Ofgem over the next pricing review, which comes into force in April 2005.

Around 150,000 E.ON customers in the UK were affected by power cuts, and around 700 faults were reported on its network last week, said the German energy group, which is the second-largest distribution network operator in Britain.

Electricité de France, which owns the largest distribution network in the UK, said that 135,000 customers in the South-east were affected. High winds and torrential rain caused as many faults on its network in a few hours as would normally occur in a fortnight, it said.

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