Option profits of pounds 1.6m for power chiefs

Click to follow
The Independent Online
Three directors of London Electricity, which has been the object of intense bid speculation, yesterday made pounds 1.6m profit from exercising share options.

They included Dr Roger Urwin, the chief executive, who announced earlier this week that he was quitting to join National Grid, the electricity company that is to be floated on the stock market in the autumn. Dr Urwin's options were granted in 1991 and 1992, soon after London Electricity was privatised.

Dr Urwin made a total paper and cash profit of pounds 834,000, before tax, on the exercise of his options on 155,000 shares, at between 261 and 300p. The market price at the time was 808p.

The profits are bound to renew Labour criticisms of the privatised electricity utilities, which are being picked off in a takeover spree. London has so far denied any knowledge of a bid approach, but Eastern is being bid for by Hanson, Manweb by Scottish Power and South Western by Southern Company of the US.

Of the other two London directors, Alan Towers exercised options on 128,000 shares for a paper and cash profit of pounds 689,000 and Ian Beament exercised 14,000 options to make pounds 71,120. After exercising, Dr Urwin kept 103,000 shares and sold the rest, Mr Towers kept only 10,000 and Mr Beament retained 4,000.

The bonanza for the directors emerged on the day Professor Stephen Littlechild, the electricity regulator, moved to strengthen preparations for introducing competition into the local electricity monopolies from 1998 onwards.

From 1998, electricity customers with peak demands under 100kW will be entitled to go to competing suppliers of electricity, who will deliver to their homes over the regional companies' networks.

After fierce criticisms by the Commons Trade and Industry Select Committee of the haphazard preparations for the change - which affects 22 million consumers - Professor Littlechild said he would establish a clear structure, and appoint consultants to form a project management team.

He is also examining whether there should be a pilot project to test the new systems with consumers, similar to the one the gas industry will start next year in the South-west.

Professor Littlechild said he accepted the outline arrangements recommended by the electricity pool for trading. Larger customers up to 100kw will be metered every half hour to match the timing of price changes in the trading pool while the rest will be billed on a standardised basis.

Professor Littlechild also set up a new industry group called the Competitive Supply Code Executive to advise on procedures for changing suppliers, pre-payment meter systems and other matters.

Meanwhile, Scottish Power, bidding pounds 1bn for Manweb, raised its stake from 12.5 to just over 14 per cent, buying pounds 18m of shares in the market at 890p.