Power cuts may lead to price curbs

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The Independent Online
THE NEW energy regulator warned yesterday that electricity companies could have their prices curbed after launching an investigation into the Christmas storms that left 350,000 homes in the north of England and Scotland cut off for periods of up to a week.

Callum McCarthy, director-general of Offer, warned that the results of the inquiry could be taken into account when he sets new price controls for the industry next year.

The four companies involved in the probe are Scottish Power, Norweb, Scottish Hydro-Electric and Northern Electric. The two areas worst affected were those supplied by Scottish Power and Norweb where a total of 230,000 customers suffered power cuts.

In the case of Scottish Power, about 100,000 households were cut off, 20,000 of them for three days. Some households were without power for a week andseveral hundred families had to be put up in hotels. The bill for Scottish Power, including repairs to storm-damaged overhead lines, is put at pounds 5m-pounds 6m.

A total of 127,000 homes supplied by Norweb in Manchester and the North- west of England were without electricity after storms hit the region the day after Boxing day. About 200 families were still without power on New Year's Eve.

Mr McCarthy said: "I recognise the efforts made by companies to restore supplies but customers want to know why it took so long and why they were unable to obtain better information about what was happening during the power cuts."

A spokeswoman added that if the investigation revealed shortcomings in security of supply this would be taken into account in the forthcoming distribution price review.

The previous electricity regulator, Professor Stephen Littlechild, carried out a similar investigation last year after storms over the Christmas and new year period caused widespread damage to overhead wires, resulting in power cuts to 470,000 households.

The investigation uncovered "subsantial failure" on the part of several companies to communicate with their customers. This may have extended repair times in some areas. In some rural areas electricity companies were unaware that customers, including the elderly and those in residential care, had been cut off.

The regulator told companies to review their communications arrangements urgently.

A spokesman for Scottish Power said that it was already conducting its own investigation and would co-operate fully with the probe launched by Offer.

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