The decision to scale down the project, managed by the computer giant IBM, comes after Sweb's partner in the venture, its Welsh counterpart Swalec, pulled out of development work late last year. Hyder, the multi- utility group which owns Swalec, blamed mounting delays and the alarming increase in costs.
Derek Lickorish, Sweb's director of customer service, said the group would concentrate on updating its existing computer systems and would be unlikely to make a final decision about the project, called Croeso, until the millennium. The move, disclosed in today's edition of Computer Weekly magazine, leaves Southern Electric as the only UK utility still pursuing the project.
Mr Lickorish said: "To introduce a new system at the same time as implementing competition in 1998 was such a massive undertaking that to me the risks were too great. The safest route is to amend our existing systems."
He declined to put a figure on the extra cost for Sweb and said estimates that Croeso would cost the three partners a total of pounds 100m were "absolute nonsense". However Mr Lickorish said: "It will cost us several million pounds. We are still evaluating the additional cost."
Croeso was announced in 1992 in a fanfare of publicity as a system which would link every aspect of customer information on to a single screen, linked to telephone inquiry staff. The complex software would track customers as they moved to different suppliers after competition was introduced. Similar systems have been built by IBM for US utilities for an average of $50m (pounds 31m).
Last night there was speculation that IBM would be left with a substantial loss on the project.