The code will be designed to protect consumers and avert the problems encountered in the gas market, where consumers have complained of aggressive and misleading door- to-door selling practices by gas suppliers.
Adherence to the code will form part of the contract terms of the electricity company's licence, and "systematic" violations of the code will be considered a breach of the licence conditions.
"We consider it important that electricity companies have a code of practice when competition is introduced to safeguard the rights of domestic consumers," said a spokesman for the Office of Electricity Regulation (Offer).
In a separate development, the plans to introduce competition in the electricity market came under fire from Dieter Helm, director of Oxford Economic Research Associates
Mr Helm was critical of the plans to introduce nationwide competition in three phases over a five-month period, starting in April, 1998. "The phased introductions are tantamount to an admission that competition in the electricity market will not happen on time or in good order," he said. "There should be a proper trial period, which will then need to be evaluated before full-blown competition is allowed."
Professor Littlechild also supports a trial, but he is prevented by the terms of electricity legislation from introducing competition in selective areas.