Offer rejects delay proposals

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The Independent Online
The electricity industry regulator, Offer, yesterday rejected proposals from the regional electricity companies that the launch of full competition in the domestic market be delayed for 18 months.

A spokeswoman for Professor Stephen Littlechild, the director general of electricity supply, said: "The idea is not acceptable to us. Let's find out if there is a problem before we start talking about the need to phase in competition."

The domestic market is due to be thrown open to full competition from 1 April, 1998, allowing 25 million households and small businesses to shop around for their electricity. At present they have to buy it from their local Rec.

However, a paper drawn up by Eastern Group on behalf of the 12 Recs, ScottishPower and Scottish Hydro recommended that competition should be phased in from April 1998 over an 18 month period because of the problems that a "cliff face" start up could cause.

The paper, which Eastern was asked to draw up by the industry body preparing the way for liberalisation of the domestic market, suggested that small business and commercial users might be given the freedom to shop around first, followed by other customers in the domestic tariff market. One suggestion was to phase in competition by postal areas.

Offer said that the industry had known since 1990 when the domestic market was due to be opened to competition, giving it eight years to prepare for the changes. It added that it saw no reason at present for a delay.