Power shortage prompts calls for Grid inquiry

MARY FAGAN

Industrial Correspondent

The Labour Party has called for an independent investigation into a crisis in the power supply industry which forced the National Grid Company to dig deep into reserves to prevent power cuts.

The NGC was forced to take emergency action at one point in July because not enough generating plants in the south east of England were available to meet demand.

Brian Wilson, Labour's trade and industry spokesman, said: "This is a deeply alarming revelation which confirms our fears about what is going on in the electricity industry since it became based on commercial relationships."

He added: "I am calling for a full independent inquiry into this event to ensure that this never happens again. The risks involved are quite literally catastrophic."

The committee which oversees the electricity industry's trading pool is also believed to be investigating the circumstances surrounding the sudden shortfall on 19 July.

The National Grid confirmed that, on what it described as an "unusual day" in July, it had to dig into its reserves to keep the nation's lights burning.

A spokesman said: "There is no legal obligation on the grid to keep the lights on but we do it because we do the job professionally. The reserves are used quite often although not to this extent. But the act is that at the end of the day the grid did the job."

He added: "We are charged with providing secure and economic supply but we cannot dictate - we cannot force the generators to generate."

One industry source rejected the suggestion that the generators were at fault. "It is the National Grid Company's job to assess demand in advance and to call up plants in order to meet that demand. You would have thought that in mid-July this would not be too hard a job to do."

The problem emerges at an embarrassing time for the Government, which has been locked in discussions with the electricity company over the planned flotation of the grid, at present owned by the 12 regional electricity companies in England and Wales.

The companies reached agreement in principle last week that the grid - worth about pounds 3.5bn - should be demerged to shareholders in December and that a pounds 50 rebate should be paid to customers shortly afterwards. The demerger plans have yet to be formally approved by shareholders and by the boards of the companies. It is also unclear exactly what level of tax the Government will levy on the companies as a result of the sale.

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