Letter: Investment in electricity

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Sir: Diane Coyle's report (5 June) fails to recognise that capital investment by the privatised electricity companies is now 40 per cent higher compared with the five years prior to privatisation.

Capital investment has become more efficient and responsive to need. Since 1990 the industry has spent almost pounds 16bn on improving the infrastructure and supply service. This is pounds 4.5bn more than in the previous five years. In addition is the contribution from the independent generating companies. Nine major power stations have been developed since 1990 at a cost approaching pounds 3bn with an additional two to be commissioned by the end of 1996 costing pounds 560m.

The expenditure on Sizewell B and the creation of cleaner, combined-cycle gas-turbine power stations, and the associated transmission network, accounted for a peak in investment spending between 1991 and 1993. At the same time, customer service levels have improved while prices have fallen. The total saving on bills between 1992 and 1995 amounts to pounds 2.5bn.

The electricity companies have not broken sell-off "pledges". The government assurance was that companies would be able to spend more on improving their services to customers. This the electricity industry has certainly achieved.


Chief Executive

The Electricity Association

London SW1