Recs could be forced to split up
Wednesday 25 October 1995
Offer, the electricity watchdog, warned that the regional electricity companies might in future be forced to split their supply operations - in which they sell to the customer - from the distribution of electricity over the wires. Professor Stephen Littlechild, director-general of Offer, said he would consider such a separation in preparation for competition in the domestic market in 1998.
The threat to the fundamental structure of the industry emerges in Professor Littlechild's response to the recent report from the Trade and Industry Select Committee on the electricity sector.
Professor Littlechild said: "In the context of the 1998 discussions I shall be considering whether to take further steps to require the greater separation of the Recs' distribution and supply activities. It would be open to me to make reference to the Monopolies and Mergers Commission if I were to conclude that the present position is against the public interest."
The regulator's comments come at a sensitive time in the industry, which is in the throes of a wave of takeovers. Bids for three regional firms have succeeded in recent months and planned acquisitions by North West Water, National Power and PowerGen are awaiting regulatory clearance.
Any sign that Professor Littlechild is considering radical changes in the businesses of the regional companies could be seen as deterrent for further bids. Investors in the industry are still smarting from his unexpected decision earlier this year to re-open price controls agreed only months previously.
The responses to the Select Committee also show that the Government may consider merging the gas and electricity regulators, Ofgas and Offer, after 1998 when domestic competition in both markets is in place. But the Government stresses that there is no case for a merger until that time and also rejects the suggestion that a regulatory panel, rather than an individual watchdog would be more effective in each industry.
The Government also attacks the committee's call to impose a duty on regulators to give reasons for the decisions they make. "The Government eschews unnecessary regulation. It therefore sees no need for a formal requirement [on the regulators] to do what, as a matter of good working practice, they do already."
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 4 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 5 Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...